Crosby kicks off Rey bid

AS expected, Hong Kong-based asset management group Crosby Capital has formally launched its cash takeover bid for Western Australian thermal coal explorer Rey Resources at A19.5c per share.
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Courtesy Rey Resources.

Blair Price

Made through its wholly owned Fusedale Australia subsidiary, Crosby’s bid represents a 117% premium to the 9c bid from New South Wales coking coal producer and Rey stakeholder Gujarat NRE Minerals.

Crosby’s offer is also a premium to the scrip-based option of Gujarat’s bid of one Gujarat share for every five Rey shares, as of the closing price of Gujarat’s shares on October 16.

Crosby’s offer closes on December 4.

A thermal coal explorer in remote Western Australia, in June Rey upgraded the resources of its Duchess-Paradise project in the Canning Basin to 511 million tonnes, including 35.2Mt measured, 143.5Mt indicated and 331.5Mt inferred.

Rey recently secured port access at Derby, with coal to be trucked 180km from the project site in a 2Mt per annum export operation.

A prefeasibility study of the open cut project will be completed late this year, with a definitive feasibility study and engineering design due at the start of 2010. Rey expects project start-up in 2012.

The company is preparing for further exploration on its leases, targeting an additional 1-2 billion tonnes of coal to support a conceptual operation of up to 20Mtpa.

Rey ended the 2008-09 financial year with $528,023 cash in bank.

Gujarat holds a 16.8% stake in Rey.

Shares in Rey closed down 9.8% to 23c yesterday.

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