Stanmore Resources has acquired South32’s 50% stake in the Eagle Downs metallurgical coal project in Queensland for $15 million, increasing its portfolio to six producing mines. This represents a significant discount from the $133 million South32 originally paid for the asset in 2018.
Key Points:
- Stanmore acquires 50% stake in Eagle Downs from South32 for $15 million.
- Potential to acquire an additional 30% from Aquila Coal, taking Stanmore’s ownership to 80%.
- Acquisition expands Stanmore’s portfolio to 13.2 million tonnes per year of saleable metallurgical coal.
- Eagle Downs has a resource of 1.14 billion tonnes and could produce 4-6 million tonnes per year of high-quality coking coal.
- Located near existing Stanmore assets and considered “optionality” for future development.
Stanmore’s Strategy:
- Leverages existing infrastructure and logistics from Poitrel and Isaac Plains mines.
- Extends mine life beyond Stanmore’s current operations.
- “Unlocks the full value” of Eagle Downs through technical expertise.
Additional Details:
- Stanmore to assume operational control and contingent royalty obligations.
- Eagle Downs previously planned as a 4.5 million tonne per year underground mine.
- China Baowu exited a take-or-pay contract for Eagle Downs in 2023.
Industry Insights:
- Analysts view acquisition as opportunistic, providing flexibility for future market cycles.
- Stanmore doesn’t intend immediate development but secures strategic positioning.
Overall:
This deal strengthens Stanmore’s presence in Queensland’s premium coal basin and provides potential for future growth. Whether development occurs soon or later, Stanmore has secured a valuable asset with significant coal resources.
