NuCoal to acquire Plashett Coal Project

Transcription

1 ASX Announcement 20 February 2012 NuCoal to acquire Plashett Coal Project Highlights: Plashett Coal Project is located strategically between NuCoal s existing Doyles Creek and Savoy Hill Projects. Plashett is an advanced exploration project with an exploration target (open cut and underground) of between 89Mt and 300Mt*. Coal seams present contain semi-soft and thermal quality coals. Drilling will focus initially on proving a JORC standard open cut resource of up to 100Mt at less than 10 cubic metres per tonne strip ratio. Staged, all-scrip acquisition purchase from The Bloomfield Group. Bloomfield Managing Director, Mr John Richards, to join the NuCoal Board as Non-Executive Director. Plashett Coal Project acquisition aimed at boosting NuCoal s mineral resource base in the Upper Hunter and providing development, operational and financial synergies and flexibility for the Doyles Creek and Savoy Hill Projects. NuCoal Resources Ltd (ASX: NCR) is pleased to announce it has entered into a binding Heads of Agreement ( HOA ) to acquire Plashett Exploration Licence 6705 ( Plashett EL or Plashett Project ) in the NSW Upper Hunter Valley from Big Ben Holdings Pty Ltd ( BBH ), part of The Bloomfield Group. Completion of the transaction will be subject to certain conditions, including NuCoal obtaining shareholder approval, Ministerial approval under the Mining Act 1992 (NSW), a drilling program to be agreed by the parties and land access and compensation agreements being agreed over the area ASX:NCR Share Information Issued Shares: 650.8m Registered Office Suite 1, 4 Honeysuckle Drive, Newcastle NSW 2300 T F E admin@nucoal.com.au Board of Directors Chairman: Managing Director: Non Executive Director: Non Executive Director: Non Executive Director: Non Executive Director: Company Secretary: G. Galt G. Lewis J. Beecher M. Chester M. Davies A. Poole M. Etcell Key Projects Doyles Creek Mining Pty Ltd Hunter Valley NSW Tenement: EL7270 Ownership: 100% Doyles Creek Underground Mine Training School Contact: Maree Roberts Dellworth Pty Ltd Hunter Valley NSW Tenements: EL6594 & EL6812 Ownership: 100%

2 covered by the drilling program. The parties are now in the process of negotiating a formal share sale and purchase agreement. The Plashett EL is strategically located for NuCoal, with the southern boundary of the EL being approximately 500 metres north of NuCoal s existing Doyles Creek Underground Mine and Training School Project (EL 7270) near Jerrys Plains, and the northern boundary being located approximately 1,800 metres from NuCoal s Savoy Hill Project (EL 6812). The Plashett EL covers an area of 942 ha and is an advanced exploration project, with 70 holes having previously been drilled on the EL. Based on these holes, NuCoal believes that there is an Exploration Target of between 89Mt and 300Mt* of semi-soft coking and thermal coal in seams within the Whittingham Coal Measures (excluding the Whybrow seam) on the EL. NuCoal will acquire the Plashett coal assets from BBH via a staged, all-scrip transaction, based on verification of coal targets as follows: An initial share issue equivalent to $10.5m being 35,000,000 ordinary NuCoal shares to BBH on completion; The second share issue equivalent to $29.25m calculated on 20 day VWAP (less exploration expenses of approximately $2m) when a 100 Mt JORC Compliant Inferred Resource is confirmed; and The third share issue equivalent to $36.25m calculated on 20 day VWAP (less exploration and analysis expenses of approximately $3m) upon achieving either a total of 200 Mt JORC Compliant Inferred Resource or the conversion of the 100 Mt Inferred Resource into at least a 60Mt Proven or Probable ore reserve in accordance with the JORC code. Once the acquisition is finalised, the Managing Director of BBH and The Bloomfield Group, Mr John Richards, will be invited to join the Board of NuCoal as a Non-Executive Director. In addition to being a director of the privately-owned Bloomfield Group, Mr Richards is a director of Port Waratah Coal Services. Commenting on the announcement, NuCoal Managing Director, Glen Lewis said: The proposed acquisition of the Plashett coal assets, subject to Shareholder approval, is another significant step in realising our stated corporate strategy of becoming a multi-mine coal company focused on developing high quality coal assets in the NSW Upper Hunter region. The Plashett Project is strategically located between NuCoal s existing projects at Doyles Creek and Savoy Hill and it offers considerable development, operational and financial synergies. We intend to commence exploration on the Plashett EL as soon as we can. Based on the information we have at this time, we believe that a significant amount of the exploration target should be amenable to open cut mining and we will focus our initial NuCoal ASX release 20 February 2012 Suite 1, 4 Honeysuckle Drive, Newcastle NSW 2300 T F E admin@nucoal.com.au Page 2 of 5

3 efforts on the shallower open cut areas targeting strip ratios less than 10 cubic metres per tonne. We expect to be able to delineate both semi soft and thermal quality coals within the Plashett EL. NuCoal s Chairman, Mr Gordon Galt said: We are delighted that John Richards will be joining the Board of NuCoal. With his experience in running coal mining companies and vertically integrated mining service providers, John will add considerably to the depth of experience on the NuCoal Board. BBH Managing Director, John Richards said: Folding Plashett EL 6705 into NuCoal makes strategic sense due to its close proximity to NuCoal s existing coal assets and other surface infrastructure, such as the Bayswater Power Station and rail lines. NuCoal have the ability to make the Plashett asset part of an expanded coal complex and therefore the sharing of infrastructure makes the capital cost of any such development significantly more economic. BBH shares NuCoal management s vision for developing high quality coal assets in the Upper Hunter which is why we have accepted the entire payment structure based on NuCoal scrip and I look forward to joining the Board. Planned Exploration NuCoal will commence phase 1 drilling (12 holes) following completion of the transaction. Expected Timeframe of Events Please refer to the separate powerpoint presentation which provides additional details relating to the Plashett acquisition. * Exploration Target References to Exploration Targets in this document are in accordance with the guidelines of the JORC Code (2004). As such, it is important to note that in relation to reported Exploration Targets, any references to quality and quantity are conceptual in nature. Exploration carried out to date is insufficient to be able to estimate and report coal resources in accordance with the JORC Code (2004). It is uncertain if further exploration will result in the determination of a Coal Resource. NuCoal ASX release 20 February 2012 Suite 1, 4 Honeysuckle Drive, Newcastle NSW 2300 T F E admin@nucoal.com.au Page 3 of 5

4 Savoy Hill Dellworth Plashett Doyles Creek Location of EL 6705 relative to the other 3 NuCoal Projects Please direct all investor enquiries to: Glen Lewis Managing Director Tel: Please direct all media enquiries to: Patrick Southam Gell Southam Group Mob: NuCoal ASX release 20 February 2012 Suite 1, 4 Honeysuckle Drive, Newcastle NSW 2300 T F E admin@nucoal.com.au Page 4 of 5

5 About: The Bloomfield Group is an Australian owned and operated group of private companies with interests in mining and engineering in the Hunter Valley, NSW. Bloomfield employs around 500 people and operates two open-cut mining operations; Bloomfield Colliery at East Maitland (40 mins from Newcastle) and Rix s Creek, 5km northwest of Singleton, NSW. Coal from both sites is railed to Port Waratah Coal Services (PWCS), of which Bloomfield is a founding member and current shareholder. The company's engineering businesses include Four Mile Engineering at East Maitland and Kings Engineering in Rutherford and Lithgow. The group also has equity positions in companies specialising in renewable energies, recycling and biofuel production. Further details- NuCoal ASX release 20 February 2012 Suite 1, 4 Honeysuckle Drive, Newcastle NSW 2300 T F E admin@nucoal.com.au Page 5 of 5

6 An Emerging gcoal Company Strategic Acquisition Plashett Coal EL 6705

7 Cautionary Statement Theinformation contained in this document (Presentation) hasbeen preparedby NuCoalResources Ltd anddoyles CreekMining Pty Limited (Company). This Presentation does not constitute an offer or invitation to any person to subscribe for or apply for any securities in the Company. While the information contained in this Presentation has been prepared in good faith, neither the Company or any of its shareholders, directors, officers, agents, employees or advisers give any representations or warranties (express or limited) as to the accuracy, reliability or completeness of the information in this Presentation, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as Information ) and liability therefore is expressly disclaimed. Accordingly, to the full extent permitted by law, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers di take tk any responsibility for, or will accept any liability whether direct or indirect, express or limited, it contractual, t tortious, ti statutory ttt or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained in this Presentation or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation. Neither the issue of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any inaccuracies in, or omissions from, this Presentation which may become apparent. The right is reserved to terminate any discussions or negotiations with any person. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. In furnishing this Presentation, the Company does not undertake or agree to any obligation i to provide the recipient i with ihaccess to any additional i information i or to update this Presentation or to correct any errors. This Presentation should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisers. Each party to whom this Presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates or projections or opinions contained in this Presentation necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should satisfy itself in relations to such matters. This Presentation may include certain statements that may be deemed forward looking statements. All statements in this discussion, other than statements of historical facts, that address further activities and events of developments that the Company expects, are forward looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward looking statements. The Company, its shareholders, directors, officers, agents, employees or advisers, do not represent, warrant or guarantee, expressly or impliedly, that the information in this Presentation is complete or accurate. To the maximum extent permitted by law, the Company disclaims any responsibility to inform any recipient of this Presentation or any matter that subsequently comes to its notice which may affect any of the information contained in this Presentation. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any forward looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in forward looking statements. Slide 2

8 Snapshot Prior to Acquisition Projects: Doyles Creek Underground Mine and Training School (100%) Hunter Valley NSW Dellworth Pty Ltd EL 6594 and EL 6812 (100%) Hunter Valley NSW Coal Resource (Doyles Creek): Measured 9.3Mt Indicated Mt Inferred Mt Total Mt Market cap: A$205 million S& P All Ords listed Cash: A$12.3 million (at 31/1/12) Management: Significant operational experience Industry Training Facility: Australia s 1 st industry backed with strong strategic partners Coal Products: Semi soft coking, thermal Port Access (Doyles Creek): PWCS 1Mt initial allocation commencing 2015 Doyles Creek (EL 7270) Exploration: 45 holes completed including a 200mm hole Savoy Hill (EL 6812) Exploration: Initial 9 holes commenced September 2011 Dellworth (EL 6594) Exploration: Initial15 holes commenced February 2012 Slide 3

9 Plashett Coal EL 6705

10 Strategic Location Hunter Valley o 35 coal mines Dellworth o 14 producers o 27 loading points Savoy Hill Doyles Creek Project Plashett Coal Project o 80 different brands of coal o 34 end buyers o 12 countries Slide 5

11 Plashett Acquisition Benefits Plashett adds to the NuCoal portfolio and offers significant synergy between the existing tenements Open cut proposition with the ability to link to the Doyles Creek Project via an underground corridor Approximately 70 historical boreholes of data available Exploration target based on past drilling of Mt* of semi soft coking and thermal coal Located near major infrastructure Slide 6

12 Plashett Acquisition Benefits May offer the ability to expand the skills on offer at Doyles Creek Underground Mine Training School Provides substantial opportunity to develop a concentrated coal handling hub for a number of related projects Internationally recognised high quality coal brands Experienced and competent management team Slide 7

13 Acquisition Details NuCoal will acquire the Plashett coal assets from BBH in a deal based totally on scrip with 2 key performance milestones based on verification of coal targets An initial share issue equivalent to $10.5m being 35,000,000 ordinary NuCoal shares to BBH on completion; The second share issue equivalent to $29.25m calculated on 20 day VWAP (less exploration expenses of approximately $2m) when a 100 Mt JORC Compliant Inferred Resource is confirmed; and The third share issue equivalent to $36.25m calculated on 20 day VWAP (less exploration and analysis expenses of approximately $3m) upon achieving either a total of 200 Mt JORC Compliant tinferred dresource or the conversion of the 100 Mt Inferred dresource into at least a 60Mt Proven or Probable ore reserve in accordance with the JORC code. Based on a targeted inferred resource of 200 Mt the consideration payable represents a price of 38c per resource tonne. This is consistent with recent relevant transactions in the coal sector refer Appendix A. Managing Director of The Bloomfield Group, Mr John Richards, invited on to NuCoal Board as a Non Executive Director. Slide 8

14 Project Details Plashett Coal PtyLtd EL 6705 Licence Area: 942 ha Licence Renewal: 22 January 2013 Location: Hunter Valley, NSW Slide 9

15 Expanded Portfolio Locations Savoy Hill Dellworth Plashett Doyles Creek Slide 10

16 Plashett Historical Borehole Locations Slide 11

17 Potential Resource Area Slide 12

18 EL 6705 Seam Sub crops Slide 13

19 Seam Crossections Slide 14

20 Plashett Coal Quality From Borehole Data Slide 15

21 Next Steps Phase 1 drilling to commence upon completion (12 holes planned). Expected timeframe of events as follows: Sign Sale and Purchase Agreement Prepare Notice of Meeting and Explanatory Memorandum Send Notice of Meeting and Explanatory Memorandum to Shareholders Hold Et Extraordinary General Meeting to approve the issue of shares for the acquisition of Plashett Completion to occur by end Q3 * Exploration Target References to Exploration Targets in this document are in accordance with the guidelines of the JORC Code (2004). As such, it is important to note that in relation to reported Exploration Targets, any references to quality and quantity are conceptual in nature. Exploration carried out to date is insufficient to be able to estimate and report coal resources in accordance with the JORC Code (2004). It is uncertain if further exploration will result in the determination of a Coal Resource. Slide 16

22 CompetentPerson Statement The Resources estimate is based on information compiled by Dr. Ian Stone, who is a Member of the Australasian Institute of Mining and Metallurgy (102087). Dr. Stone is Manager, Geology of Palaris Mining Pty Ltd. He has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person, as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr. Stone has over 30 years experience in exploration and mining of coal deposits. Dr. Stone consents to the inclusion of this Resource Estimate in reports disclosed by the Company in the form in which it appears.

23 Appendices

24 Transaction evidence Appendix A Summary of relevant recent transactions Date Target Acquirer Coal Resources Interest type Mt acquired % May 11 Ellemby Holdings Pty Ltd (Monash) Purchase price A$m Total resource A$ per tonne Gloucester Coal Ltd SSCC, TC May 11 Vickery South (Coalworks ITOUCHU Corporation SSCC, TC Ltd) Jul 10 Bylong Korea Electric Power TC (KEPCO) Feb 10 Doyles Creek Project NuCoal Resources Ltd SSCC, TC Average 0.53 Average ex Bylong 0.38 Slide 19