Rinehart moves in on Carabella

AUSTRALIA’S richest person Gina Rinehart has snapped up a piece of Queensland coking coal explorer Carabella Resources after its managing director Mitch Jakeman left the company in a dramatic boardroom dispute over management style.
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Gina Rinehart

Lou Caruana

Timeview, which is a subsidiary of Rinehart’s Hancock Prospecting, has acquired a 0.74% stake in Carabella, which owns prime coking coal exploration assets at Mabbin Creek in the Bowen Basin.

Mabbin Creek is located close to existing road, rail and power infrastructure, and is adjacent to a number of world class coking coal mines.

Carabella’s latest exploration report indicates that it has 95.3 million tonnes of JORC-compliant resources.

Carabella, which saw its share price soar from $1.70 on Tuesday to $2.08 yesterday, attempted to hose down Hancock takeover speculation.

"Carabella considers this information should be released to keep the market fully informed, particularly in view of ongoing consolidation in the coal sector," it said.

"To date, Carabella has not been contacted by either Timeview Enterprises or Hancock Prospecting in regard to the acquisition of shares and Carabella is not aware of the intentions of either."

Hancock is the owner of coal tenements further west in the Galiliee Basin and is seeking Indian equity for its Alpha and Kevin’s Corner prospects as well as joint infrastructure arrangements.

The Alpha and Kevin's Corner projects have a combined resource of 7.9 billion tonnes.

The Alpha project alone has enough coal resources to have an open cut mine life of 30 years with production of 30Mtpa, and enough JORC-compliant resources to extend the mine's life past that.

Hancock’s coal assets also have the added attraction of having access to infrastructure.

Hancock and BHP Billiton were named the preferred developers of the Abbot Point terminal on the coast of Queensland, and Hancock has secured an initial 30Mt of stockpile capacity with an opportunity to expand to 60Mt.

Carabella, whose $12 million IPO closed early and oversubscribed with strong institutional support in December last year, has pegged rare available premium coking coal tenements adjacent to BMA’s Goonyella-Riverside and Broadmeadows mines.

Earlier this week Jakeman quit Carabella citing “irreconcilable differences” with the board.

Former Anglo American head of operations Jakeman saw his 4% holding in the coal exploration company soar in value by 87% when it debuted on the Australian Securities Exchange.

Jakeman, who holds 3,382,929 shares and 2 million options in Carabella, made a paper profit of $1.63 million on his undiluted stake in the company when it listed.

Carabella has since risen to seven times its listing price and is on the fast track to coking coal production by either longwall or open cut mining methods.

Jakeman, a veteran of the Bowen Basin, has worked with a number of other major global coal companies including BHP, Shell Coal and Rio Tinto. He was instrumental in installing the largest longwall at Anglo American’s Moranbah North mine.

David Begley, formerly executive manager at Carabella, has been appointed as interim chief operating officer, effective immediately following Jakeman’s departure.

Begley has spent the last 20 years as a business improvement management consultant to the mining industry, and has consulted to some of the world’s largest resources companies, including Anglo Coal Australia, BHP, Rio Tinto, Xstrata, Barrick Gold, Lihir Gold and Vale.