New Hope offers new hope to NEC

NEW Hope Corporation has completed a strategic review of Northern Energy Corporation’s project portfolio as it seeks to buy out the minority shareholders in the Queensland explorer.
New Hope offers new hope to NEC New Hope offers new hope to NEC New Hope offers new hope to NEC New Hope offers new hope to NEC New Hope offers new hope to NEC

Northern Energy's Colton mine project.

Lou Caruana

On August 29 New Hope lodged an unconditional off-market takeover offer for the shares in NEC that it does not already own. On that date New Hope controlled 94.7% of NEC’s shares.

NEC will continue to develop the Colton coking coal project based on a production rate of 0.5 million tonnes per annum. New drilling data indicates the maximum potential size of a potential Stage 2 Colton mine is about 2Mtpa.

A native title agreement with the Butchulla people has been agreed and a coal seam gas co-development agreement has been reached for Colton.

The Wiggins Island Coal Export Terminal documentation continues with NEC funding its capacity obligation.

NEC is also evaluating the Elimatta project for a mine of 5Mtpa capacity with appropriate infrastructure.

New Hope has agreed to provide short-term debt funding to NEC for a maximum term of 12 months.

New Hope’s Queensland operations annual raw coal production dropped by 5% to 11Mt as it struggled to recover after the 11 week flood-induced rail outage.

Its net profit after tax for the year 31 July 31, 2011 is expected to be in the range of $498 million to $503 million, which would include non-recurring items in relation to the gain on the sale of Arrow Energy and on the sale of a 10% interest in the New Lenton project.

Raw coal production at its new New Acland mine for the June quarter was at record levels at 2.665Mt.

A combination of high opening inventory levels and good railing performance resulted in coal sales of 1.748Mt, 9% above that of the corresponding period in 2010 and 105% above that of the flood-impacted previous quarter.

Its Queensland Bulk Handling export throughput was increased to 2.3Mt, up 27% over the corresponding period in 2010. This was also a quarterly record performance for QBH, with performance over the past two months reflecting an annual throughput rate of over 9Mtpa.