Summary
Stanmore Resources has acquired the remaining 50% interest in MetRes Pty Ltd, gaining full ownership of the Millennium and Mavis Downs coal mines. This will result in:
- Increased coal volumes for Stanmore.
- MetRes joining Stanmore’s consolidated group for tax and accounting benefits.
- Stanmore assuming MetRes’ existing financial obligations and potential future environmental liabilities.
- Streamlined operations through consolidation with nearby mines.
- Royalties paid to the seller based on specific coal prices.
- Continued management of MetRes by M Mining, focusing on underground operations.
- Marketing and logistics services provided by M Resources.
Overall, the acquisition strengthens Stanmore’s position in the coal industry and simplifies operations, though it adds financial obligations and royalty payments.
Details
The Board of Stanmore Resources Limited (“Stanmore” or the “Company”) (ASX: SMR) is pleased to announce that it has signed a share sale agreement to acquire the remaining 50% interest in MetRes Pty Ltd (“MetRes”)(“Acquisition”) and has successfully completed the Acquisition contemporaneously.
Prior to the Acquisition, Stanmore owned a 50% interest in MetRes, a 50/50 joint venture company with Marmilu Pty Ltd (an M Resources affiliated entity), owner of the Millennium and Mavis Downs Mine (“Projects”). Stanmore now owns 100% of MetRes. Stanmore has also amended the terms of its finance facility with MetRes to increase the total facility to $105 million and extend the expiry date to align repayment terms with current expected project returns.
Transaction Summary
In addition to the share sale agreement to give effect to the Acquisition, the parties also executed a royalty deed and have amended the terms of the operating agreement pursuant to which a related entity of the Seller, M Mining, manages the MetRes operations, with future focus on underground operations, based on a cost pass through basis and an agreed management fee.
Rationale for the Transaction
The acquisition of the remaining 50% interest in MetRes (and the underlying Projects) will allow Stanmore, as the main creditor of MetRes, to consolidate ownership and streamline operations between Millennium and our adjacent Poitrel and Red Mountain operations to help to overcome some development challenges. From a tax perspective it allows MetRes to join the Stanmore tax consolidated group, as well as benefiting from associated accounting and corporate efficiencies.
