Tuesday, January 29, 2013

Riversdale Resources finding the money

From today's Wall Street Journal

Riversdale Hires Macquarie, Nomura to Lead $63.4 Million IPO

Riversdale Resources Pty Ltd. has picked Macquarie and Nomura as lead managers for its around 60 million Australian dollar (US$63.4 million) initial public offering, as management look to repeat their success with Mozambique-focused Riversdale Mining—this time in North America.
Bloomberg News
A bucket wheel reclaimer operates on a coal stockpile site at the Onahama port in Japan.
The Sydney-based company, which is headed by Steve Mallyon and Michael O’Keeffe, hopes to join the Australian Securities Exchange by the end of June and provide investors with exposure to one of the few companies focused on coking coal mining.
Riversdale recently struck its second deal to acquire coal reserves in North America, buying a resource in Canada’s Alberta province estimated at around 400 million tons of metallurgical coal used in steelmaking.
In an interview with Deal Journal Australia earlier this month, Mr. Mallyon said the company was seeking banks with strengths in multiple markets, especially Australia, Asia and North America, to lead the IPO.
“We are happy with the result as it will enable us to secure global distribution particularly in Canada where Macquarie is very strong and also into Asia with Nomura,” Mr. Mallyon said Tuesday.
Funds raised in an IPO would be used partly for the A$47 million acquisition of the Grassy Mountain deposit in Alberta from Consol Energy Inc. CNX +2.48% and Devon Energy Corp. DVN +3.48%, together with some other coal properties nearby.
An IPO would also help pay for a full feasibility study into a mine at Grassy Mountain capable of producing around two million tons of coal a year, broadly split between hard coking coal and pulverized coal injection, or PCI. Grassy Mountain is estimated to have recoverable reserves of around 50 million tons of coal, meaning any mine there could operate for around three decades.
An added attraction is its location around 6 kilometers from a rail line connecting either the Westshore coal export terminals in Vancouver or, further to the north, the Ridley terminals at Prince Rupert.
The acquisition comes almost exactly a year after Riversdale Resources snapped upnearly 10,000 acres of land in Alaska’s Mat-Su Valley containing high-quality bituminous coal after bidding highest in an auction run on behalf of the Alaska Mental Health Trust Authority.
Work began on the Chickaloon project in Alaska last year-once mined a century ago to supply the U.S. Navy, which needed coal to power their Pacific fleet-and Riversdale hopes to be able to export coal in future to Asian steel mills, likely through nearby Port McKenzie.
Some of the money raised in an IPO would be used to help further the Chickaloon project’s development.
Riversdale has been targeting North American coal assets, in part because it can tap a large labor pool of experienced coal miners stateside. That contrasts with a skills shortage in Australia due to the heavy investment taking place in developing resources such as iron ore, coal and natural gas.
Mr. Mallyon and Mr. O’Keeffe, who is Riversdale Resources’s chairman, are well known to Australian investors for the growth and eventual sale of Mozambique-focused Riversdale Mining to Rio Tinto PLC in 2011 for nearly US$4 billion.



Anonymous said...

So assuming their IPO goes well, then they would do a full feasability study and they would be out of money. So then they would have 2 choices, do another IPO and build a mine or the more likely choice would be to sell the property.I think we are looking at a few years even before the feasability study could be completed.Where it would go from there is anybodies guess.My best guess would be a minimum of 10 years before anyone is mining there and potentially never. So this is kinda of good news for the CNP but it is not anything that will happen in the near term.

Anonymous said...

"Seeking the money" would be more accurate.

This deal was described as a "conditional sale".

Does that mean "offer to purchase conditional on purchaser getting financing"?

Anonymous said...

Former Riversdale chief addresses Rio writedown
31 Jan 2013