Stanmore Coal Ltd. announced through a 50/50 joint venture with an M. Resources affiliated entity, MetRes Pty Ltd., it has executed agreements with Peabody Energy Australia to acquire a 100% of the assets, rights and obligations associated with the Millennium and Mavis Downs mine.
Restarting the mines represents a low capital and quick-to-market investment opportunity in a high-quality metallurgical coal asset, supported by access to existing critical infrastructure. Mining is planned to recommence from July 2021, with planned production ramping up to 1 million metric tons per year (mtpy) with coal washing undertaken at the Red Mountain infrastructure coal handling and preparation plant via a fully executed toll washing and train loading agreement. The restart of the Millennium and Mavis Downs mine is expected to create an estimated 150-200 jobs, throughout the investment in underground expansions and completion of rehabilitation obligations.
The acquisition provides Stanmore with synergies identified between its existing assets and the Millennium assets, including access to available infrastructure, product blending, and other operational and project related savings.
The mine is located near Moranbah, Queensland, adjacent to Stanmore’s Isaac Downs project. The mine is currently in care and maintenance.
Historically, Millennium has produced benchmark level HCC64 hard coking coals and PCI coals, complementary products to the
existing Stanmore mines, which may allow for beneficial coal blending synergies.
Stanmore will provide the joint venture with a total finance facility of up to A$30 million, including a working capital debt facility of A$15 million to the joint venture to cover initial working capital requirements, and an additional A$15 million debt facility to support rehabilitation surety obligations if required.
Stanmore will act as guarantor of the joint venture. M Resources will appoint a wholly owned subsidiary, M Mining Pty Ltd. as the joint venture manager and operator of the proposed mining activities. M Resources to be appointed as exclusive marketing agents for the joint venture.