Bathurst gains approval to buy land for coal mining at Nightcaps

Thursday 30th June 2016

Bathurst Resources, which turned to a loss in its first half in the face of continued weak coal prices, has won Overseas Investment Office approval to buy 85 hectares of forestry land at Nightcaps in Southland, gaining access to seams adjacent to its Coaldale mine.

The opencast coal mine on the land will be known as the Black Diamond mine and "will result in the retention of a significant number of jobs as well as the creation and retention of a considerable number of indirect jobs," according to the consent from the OIO. Bathurst's Coaldale mine was "close to being economically exhausted."

Bathurst is buying the land from Southland Plantation Forest, a forestry company owned by Japan's Oji Holdings, Itochu Corp and Fuji Xerox Co. It is part of a wider, semi-mature forestry block.

The price of the transaction was withheld. The company raised A$4.25 million in a sale of convertible notes in April to refinance existing facilities, provide working capital and to cover A$750,000 costs for due diligence on "an impending NZ coal opportunity".

The company has hunkered down over the past year, laying off staff, trimming its board size and writing off the entire value of its Buller mine assets as it waits for coking coal prices to improve. The miner had a protracted battle to win resource consent for the Denniston Plateau project as environmental groups opposed the application all the way to the Supreme Court.

Hamish Bohannan resigned from Bathurst in March after five years running the company and was replaced by chief operating officer Richard Tacon.

The shares last traded on the ASX at 1.3 Australian cents and have declined 13 percent in the past 12 months. The stock was as high as 27.7 cents in October 2013.

BusinessDesk.co.nz

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