Coal miner seeks payment from Blumont
Resource Generation says A$22.6m payment for 15% stake not received on due date
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Resource Generation says A$22.6m payment for 15% stake not received on due date
Andrea Soh
06 December 2013
It is one pit after another for mining company Blumont Group.
Yesterday, South African coal miner Resource Generation said it was taking action to obtain funds that Blumont has not yet paid the firm.
Blumont was to have paid the firm A$22.6 million (S$25.6 million) for a placement of about 102 million Resource Generation shares at 22 Australian cents per share. This was said to have been due on Wednesday.
“There is an agreement which is legally binding, so we’ll be taking action as we see fit,” said Resource Generation managing director Paul Jury when contacted by The Business Times, adding that he has not been able to get in touch with the group.
“I’ve had no correspondence with Blumont.”
The proceeds were to be used to develop Resource Generation’s Boikarabelo coal mine in Waterberg, South Africa.
The subscription of the new shares from Resource Generation was to give Blumont a 15 per cent stake in the company.
Blumont’s acquisition of the shares was to strengthen its exposure to thermal coal.
“We foresee that the Waterberg Boikarabelo coal mine will be the centrepiece in our global thermal strategy,” Blumont’s executive chairman, Neo Kim Hock, had said in an announcement in September.
Blumont did not respond to BT’s queries by press time.
The Boikarabelo mine accounts for 40 per cent of South Africa’s remaining coal resources.
The firm said there are probable reserves of 744.8 million tonnes of coal on 35 per cent of the tenements under its control. South Africa produced 269 million tonnes last year, according to the World Coal Association.
Singapore-listed Noble Group also has a 12.85 per cent stake in Resource Generation, a partnership that includes a 35-year off-take agreement.
The development comes barely a week after another minerals explorer listed on the Australian Securities Exchange, Prospect Resources, said it was suing Blumont Group, its new chairman Alexander Molyneux and financial adfirm Pacific Advisers Pte Ltd.
Blumont had on Oct 31 announced that it was terminating a deal to subscribe to 325 million new Prospect shares at 1.2 Australian cents per share, as it was believed that the Australian firm had not fulfilled the condition of getting paperwork done for its acquisition of two gold projects in Zimbabwe.
The deal would have given Blumont a 43.5 per cent stake in Prospect.
In its latest update on the matter on Monday, Blumont said it had not heard from Prospect nor had it been served with any court papers yet.
Blumont’s shares closed 0.7 cent lower to hit a four-year low of 7.3 cents yesterday. The stock has fallen 97 per cent since a peak of $2.45 on Sept 30.