Not a done deal.
ANOTHER in principle, non-binding agreement gives keeps Anglo miners on tenterhooks.
Wednesday 06 April 2016
FOXLEIGH miners will have to wait 3 to 4 months to find out what the future holds following an in-principle agreement by the mine's owners Anglo American to sell it to Sydney based Taurus Fund Management.
Like the still-to-be-confirmed sale of the Callide mine near Biloela to Batchfire Resources just over a month ago, Anglo American have been unusually quick to go public with news of the proposed sale, but unwilling to name any sort of sale price or details.
In a written statement the company said it had “entered into a sale and purchase agreement” with Taurus for its 70% stake in the mine.
Despite the official sound, the agreement doesn't mean much however, other than acknowledging that both parties have put down on paper a deal they would be both willing to do - subject to due diligence.
Importantly the deal has yet to be actually done.
Taurus Fund Management director Ian Bain told local media it had been working on the transaction for five months, and it would take three or four months to finalise.
"This is not a new direction. We've had (coal mining) investments in (the USA), New South Wales and Queensland," he said.
"It's a good mine, it's a good product which is metallurgical coking coal, which we're interested in. We like the fundamentals for coking coal."
Since announcing its plans to exit the coal sector last year Anglo has had a strong incentive to deliver on its promise to investors - which might explain the earliness of the announcements.
However at the time of writing, none of Anglo’s coal assets has actually been sold, and Shift Miner understands a viable bid has not been received for Anglo’s two Bowen Basin jewels, the Moranbah North, and Grosvenor mines.
Anglo American bought the Foxleigh mine nearly a decade ago for more than $700 million, from four Queenslanders, John Philip Thorsen, Trevor Michael Bailey, Paul Armand Darrouzet and the family of Gordon Smith ( who died in 2007). The four had equal shares and started exploring and developing the mine in 1998, although the area has been considered highly prospective since the 1960’s.
The four are contemporaries of the likes of Jim Gorman and Ken Talbot, who made millions developing the nearby Jellinbah mine. Mr Talbot went onto make another fortune selling Macarthur Coal to Peabody.