This asset was almost sold to Nathan Tinkler last year for $150 million, but that deal ultimately collapsed after he failed to make a final payment.
The Sekitan transaction has an aggregate value for Peabody of up to $75 million including cash of up to $20 million and assumption of liabilities totalling $55 million.
The transaction also releases certain guarantees in place for reclamation activities. Closing is expected in the third quarter of 2015, subject to satisfaction of certain conditions.
Peabody bought Wilkie Creek in 2002, and the mine ceased operations in 2013.
RFC Ambrian said it worked with Sekitan to acquire the 611 million tonne resource Wilkie Creek thermal coal project.
“Currently on care and maintenance, Peabody has borne all the shut-down costs. Sekitan has approached the project with a ‘clean sheet of paper’ and reset the cost base,” according to RFC Ambrian.
First production is scheduled for 1Q16, at an annual rate of 3Mtpa, with cash costs of $A69/t (versus 2.4Mtpa at $A110/t under Peabody). The current market price is around $80/t. The approximate 50% cash cost fall is attributable to a 30% cut in the workforce, a reduction in costs per person, right-sized mining equipment and an enhanced yield, according to RFC Ambrian.
Expansion opportunities to 5Mtpa or more are available.
