Resource News

Linc gets written offer for Queensland coal assets

LINC Energy is considering a “written offer” for the purchase of three coal properties in Queensland, but wouldn’t disclose the offer’s size or whether it meets its expectations.

Separately, Linc said the three assets could be worth well over $1.5 billion, in an indication it’s trying to drive a harder bargain now that coal export markets are displaying signs of an Asia-led recovery.

Linc has been trying to sell its non-core coal assets in Queensland for close to 18 months, during which time an agreed sale of one tenement to China’s Xinwen Mining Group for $1.5bn collapsed. Exclusive talks for all three properties with another Chinese group, Yanzhou, fell through too.

Linc wants to sell the assets so it can focus on its coal-to-liquids fuel business, which it recently moved to South Australia.

While the sale is taking longer than hoped, Linc said discussions are continuing with a number of offshore and Australian parties, either for the sale of individual properties or all three properties together.

“A written offer for the purchase of all three coal assets has been received from one party, and whilst negotiations with that party are now at a very advanced stage, the company is continuing to progress all potential avenues…,” Linc said in a statement.

Linc said its board has insisted that a sizable deposit be placed by any buyer, with “a considerable amount of time spent” working through the detail.

Brisbane-based Linc’s shares rallied on the news, rising 9.8 per cent to $1.62 in afternoon trading.

The company said an independent consultant has valued Emerald, assuming there’s a mine development there, at $529m, which is still a far cry from the $1.5bn Xinwen was prepared to pay shortly before global markets dived in late 2008.

Independent assessments of the other two properties–Galilee and Pentland–are underway, but Linc said it reckons Galilee is worth over $1bn.

Pentland is the smallest of the assets and Linc hasn’t provided an estimate for its value.

“The company believes that the opportunity to unlock value from the coal assets continues to increase,” Linc said…read more at The Australian