Kairiki Energy (ASX:KIK) has entered into an agreement with Cape Coal to purchase Cape’s Bowen Coking Coal Pty subsidiary. Bowen owns a 15% interest in the Lilyvale JV and a 5% stake in the Mackenzie JV with Stanmore Coal (ASX:SMR), as well as an option to acquire 100% of the Cooroorah and Hillalong coal projects from Australian Pacific Coal (ASX:AQC). It’s Kairiki’s intention to exercise the option when the acquisition of Bowen will be completed.
Kairiki will issue 240M new shares (with a current value of A$2M) as consideration for the acquisition of Bowen Coking Coal, and is looking to secure more coking coal assets in Australia.
That seems to be a very acceptable price based on the details of the projects (Mackenzie contains 161 million tonnes of coal based on the 2004 JORC code, whilst Lilyvale is located next to the producing Kestrel mine, operated by Rio Tinto (RIO). The Cooroorah coal project hosts a total (underground) resource of 125 million tonnes whilst Rio Tinto used to be the joint venture partner on the Hillalong exploration project.
Kairiki aims to complete all transactions by the end of the first quarter of this year, and will have in excess of 1.4 billion shares outstanding, including placements to raise in excess of A$4M in cash. Kairiki is establishing itself as an interesting coking coal play, but the company still has a long way to go (and isn’t in the driver seat at the Lilyvale and Mackenzie projects).
Go to Kairiki’s website
The author has no position in Kairiki Energy. Please read the disclaimer
