Whitehaven advised the Australian Securities Exchange that it has a voting power in more than 50% of the issued shares in Coalworks and the offer has been extended until 4 July.
Whitehaven told Coalworks shareholders that the company’s assets would be developed more efficiently in combination with Whitehaven’s existing assets.
Whitehaven managing director Tony Haggarty said: “The acquisition of Coalworks represents a logical next step for Whitehaven which will allow Whitehaven to consolidate its development and exploration portfolio.”
Whitehaven already claims it has a strong production and profit base from five producing mines, a substantial growth pipeline, including two advanced projects, a suite of high quality exploration assets and a competitive cost base from its Gunnedah Basin mining operations.
Whitehaven’s saleable production is expected to grow from approximately 4.7 million tonnes per annum in FY2011 to approximately 25Mtpa by FY2016.
Whitehaven would be able to add Coalworks’s South Vickery project to its Narrabri longwall mine which is now undergoing final commissioning, its Vickery project, and the Maules Creek project which it acquired with its $5.1 billion merger with Aston Resources.
Whitehaven expects longwall mining at Narrabri to produce at an annualised rate of approximately 6.0Mtpa of ROM coal. An additional 0.5Mtpa of ROM coal will be available until 2025 from mains and gates development.
Maules Creek’s current resources are expected to support a large open cut mining operation for more than 30 years at an average saleable coal production rate of approximately 10.8Mtpa.
The company expects that Maules Creek will be commissioned and first coal production will commence in mid calendar year 2013, with saleable production exceeding 10Mtpa from FY2016 onwards.
Open-cut resources of 460Mt have been defined in the combined Vickery area (Vickery, Merton, Bluevale and Canyon Extended). Current mine planning has defined an open-cut recoverable reserve of approximately 139Mt.
Whitehaven’s current work program at Vickery is focused on further defining and extending reserves to support the mine development plan.
Whitehaven expects this work to produce an open-cut mine plan for Vickery of approximately 4.5Mtpa ROM for at least 25 years with a stripping ratio of approximately 10:1. However, at this stage, a feasibility study has not been completed to enable a capital expenditure budget for Vickery to be established.
Coalworks commissioned a prefeasibility study at its Vickery South coking and thermal coal project, for which it also made a strategic land acquisition to position the project for infrastructure access, with production expected to commence in 2015.
The prefeasibility study found that an open cut truck and shovel operation producing 3Mtpa ROM coal with a 16 year mine life was viable. It would produce a total of 43.2Mt ROM coal, with 30Mt being semi soft coking coal and 6.3Mt of thermal coal.
Coalworks has identified a 58.5 Mt JORC compliant bituminous coal resource, which includes 48Mt measured, 0.1Mt indicated and 10.4 inferred resource at Vickery South.
“With regards to Vickery South, Whitehaven intends to analyse its optimal development path, taking into consideration Whitehaven’s Vickery project,” Whitehaven said in its bidder’s statement.
Whitehaven also holds an 11% interest in the Newcastle Coal Infrastructure Group, which operates the Port of Newcastle’s second dedicated coal terminal, owns 100% of the Gunnedah coal handling and preparation plant and train loadout facility; and has a 50% interest in the Blackjack joint venture, which operates a facility that produces retort coke on Kooragang Island in Newcastle.
