BRL 3.85% 13.5¢ bathurst resources limited.

BRL likely copies Cockatoo recap path

  1. 214 Posts.
    This is what COK AU is doing today (see below).

    Effectively it is a $0.002 takeover/recapitalization backed by new cornerstone investors.

    COK AU last traded at $0.014 i.e. recap at 85% discount.

    Shares outstanding prior to recap = 4.6bn.  Shares outstanding post the recap = 67.1bn.

    This is what BRL will likely do at some point (IMO).

    Cockatoo - $125m rights issue

    Offer Type & Size

    Offer to raise up to A$125 million by the issuance of 62.5b new fully paid ordinary shares (“Shares”) through;
    • A$125m Fully Underwritten Entitlement Offer (“Entitlement Offer”)
    • Institutional Offer Bookbuild to clawback Entitlement Shares from Underwriters (“Institutional Bookbuild”)
    • Retail Offer Bookbuild to clawback Entitlement Shares from Underwriters (“Retail Bookbuild”)
    Use of Funds
      • Funding of the Baralaba Expansion Project;
      • Working Capital & Finance requirements until at least 2017;
      • Costs of the Entitlement Offer

    Company Highlights

    The original Baralaba Expansion involves transitioning the mine from the central pit to the northern pit, and increasing output from 1.0Mtpa (PCI and thermal) to 3.5Mtpa (PCI only).  The estimated capital cost was originally A$311M (2013 real $, excluding contingency). This was to be funded by project finance of A$180M from ANZ, with further contributions from joint venture partners Cockatoo (80%) and JFE (20%). The revised plan sees the Company move to retain 95% ownership of the project and extend the capital expenditure program to more closely match operating cashflows.  Initial capital costs of A$132M over 2015 and 2016 plus funding costs of A$15m will be funded by an A$125M fully underwritten Entitlement Offer, together with operating cash flows. The balance of expansion capital will be funded from operating cashflows from 2017 to 2019.
    • The re-optimised plan enables Cockatoo to better match its capital expenditure requirements for Baralaba with forecast mine revenues, allowing a more appropriate platform to achieve its long-term ambitions
      • Removal of project or mezzanine finance decreases financing costs.
      • Removal of financing undertakings, allows mine plan flexibility to respond to PCI pricing
      • New structure allows Baralaba’s forecast cashflows to contribute to future required capital expenditure
      • Longer term outlook for PCI prices (and therefore Cockatoo) is positive
    • Fully financed solution backed by cornerstone investors
      • Significant equity investment limits finance costs, maintains financial flexibility
      • Re-optimised mine plan and significant overhead reduction
    • Only ASX investment opportunity primarily driven by ULV PCI market
      • 69Mt JORC marketable reserves and 321Mt resources across Baralaba North & South
      • High quality Ultra-Low Volatile (ULV) metallurgical product; steel making ingredient with limited supply
      • Cockatoo highly leveraged to recovery in met coal prices
    • Track record of operational expertise
      • Cockatoo has owned its interest in the Baralaba mine since 2008
      • Continued increase of production profile at Baralaba throughout ownership
      • First phase expansion at Baralaba North delivered on time and 6% under budget
      • EIS for 3.5Mtpa delivered in 13 months, one of the fastest EIS’ under the QLD EP Act
      • Remaining approvals underway
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