West Coast coal mine developer Bathurst Resources has secured future growth at its Southland mine near Nightcaps with the $14 million purchase of an adjoining farm.
While Bathurst awaits the start of several legal challenges before it can begin new coal-mining operations on the Denniston plateau above Westport, it is operating the 140-year-old Takitimu thermal coal mine near Nightcaps it bought for $46 million in March last year. The mine produces 175,000 tonnes annually.
Bathurst shares streaked ahead of all the NZX gainers yesterday, briefly gaining 25% and trading up from 40c to 50c around midday before slumping to 38c, on light volumes.
The farm acquisition encompasses Bathurst's extension of its Takitimu mine into the Coaldale block, which is on the property and required Overseas Investment Office approval for purchase.
Earlier company updates said the Takitimu resource was expected to be depleted by the end of this year.
Coaldale was estimated to have a six-year life, also delivering about 170,000 tonnes a year, for dairying and food processing.
The $14 million purchase is to be settled in two payments over five months. Bathurst is still seeking to secure financing to fund the purchase, but may pay for it out of cash reserves, which stood at $A53.8 million ($NZ70.1 million) in June. It also retains $US90 million ($NZ113.9 million) in available banking facilities.
Bathurst managing director Hamish Bohannan said the acquisition of the neighbouring farm might lead to a "significant additional resource upgrade", while removing royalty payments to the former landowner and improving the economics of the operation.
Bathurst has spent more than $100 million buying and developing the Denniston plateau in preparation for beginning new mining operations targeting two million tonnes of specialist hard coking coal for export, but faces at least two legal challenges first.
Last week, the High Court announced it would, on Monday, start hearing a challenge by the Royal Forest and Bird Protection Society of New Zealand and the West Coast Environmental Network, which is appealing an earlier High Court decision not to have climate change issues heard during consent challenges set down for an Environment Court hearing.
Separately, Forest and Bird and the Environmental Network will meet Bathurst in late October in the Environment Court, to challenge the more than 20 resource consents awarded to Bathurst by two West Coast councils last year. Bathurst was unsuccessful last week in attempting to get the hearing shifted straight to the Court of Appeal.
