Bowen beefs up its expertise with former Anglo Coal, Stanmore Coal heads
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Special report: Bowen Coking Coal has attracted two highly experienced coal executives to is ranks – and one is injecting a decent chunk of cash into the explorer and developer.
Neville Sneddon, the former managing director of Anglo Coal Australia, has joined Bowen (ASX:BCB) as chairman.
Meanwhile, Nick Jorss, who is the founder and former head of ASX-listed Stanmore Coal (ASX:SMR), has taken up the role of non-executive director.
Mr Jorss has agreed to inject $500,000 into the Bowen Basin-focused coal explorer by way of a placement.
The placement is being made to the St Lucia Resources Capital Fund (SLRCF) at 1.6c per share.
The shareholders of SLRCF are Mr Jorss and the two other co-founders of Stanmore Coal — which is currently the target of an all cash bid in excess of $240m.
“I am very pleased to be supporting Bowen Coking Coal and joining the board alongside Neville who was my chairman at Stanmore Coal,” Mr Jorss said.
“I think Bowen, led by Gerhard, has done a great job of aggregating a strategic position in the Bowen Basin, the tightly held epicentre of high-quality coking coal exports to the world.”
Bowen is rapidly advancing its Cooroorah project in Queensland’s highly prolific Bowen Basin.
The Bowen Basin, a 60,000 sq km area in central Queensland, hosts Australia’s biggest coal reserves and virtually all of the known mineable prime coking coal, according to the Bowen Basin Underground Geotechnical Society.’
“There has been a dearth of coking coal mine developments in recent times despite the continued strong demand for the product from the global steel market,” Mr Jorss said.
“This has led to exceptional prices for coking coal and a strong outlook for the commodity.”
Decades of experience
Mr Sneddon is a mining engineer with over 40 years’ experience in most facets of the Queensland and NSW resource sectors.
Bowen said as the recently retired chairman of Stanmore Coal, he brings substantial board and industry knowledge to the company.
Meanwhile, Mr Jorss has over 20 years’ experience in investment banking, civil engineering, corporate finance and project management.
He served on Stanmore’s Board from its formation in June 2008 through to November 2016.
Mr Jorss was instrumental in the success of Stanmore Coal, leading the company from a coal explorer to a profitable, mid-tier producer.
“We are extremely pleased to have secured the services of two highly experienced, competent, successful and respected coal mining executives in Neville and Nick,” Bowen managing director Gerhard Redelinghuys said.
“In addition, Nick’s desire to invest a significant amount of capital into Bowen is a great vote of confidence in the company’s portfolio of coking coal assets.”
Bowen’s Coorooorah project lies between newly-listed Coronado Global Resources’ (ASX: CRN) Curragh mine and the Anglo, Marubeni and Sojitz owned Jellinbah mine in Queensland’s Bowen Basin.
US-based Coronado Coal is the biggest coal mining float since Yancoal Australia’s $1.5 billion listing in 2012.
Coronado is one of the biggest metallurgical coal producers outside of the major diversified miners.
The same coal seams that run through the former Wesfamers-owned Curragh mine, which produces 8.5 million tonnes of metallurgical coal each year, also extend into Bowen’s tenements.
The Cooroorah project hosts the same type of coal structure — known as the Rangal coal measures — mined at Curragh.
The Rangal coal measures are extensively mined throughout the Bowen Basin to supply high quality coking, pulverised coal injection (PCI) and thermal coal for the seaborne market.
Coking coal is vital in steel production.
PCI is commonly used in blast furnaces as a replacement for coke in the steelmaking industry, and trades at a premium to semi-soft coking coal.
Following the appointments and placement, the company intends on fast tracking our development efforts in order to bring one of the assets into production as soon as possible.
Hitting the target
In recent drilling aimed at upgrading the Cooroorah resource, Bowen hit all the target seams, including the key Mammoth seam.
The project already hosts 154 million tonnes of high-quality coking coal, with 69 million tonnes of that in the higher confidence “indicated” category and 85 million tonnes in the “inferred” category.
Mineral resources are categorised in order of increasing geological confidence as inferred, indicated or measured.
By moving resources into the indicated category, it means a company has sufficient information on geology and grade continuity to support mine planning.
One of the goals of the latest round of drilling is to convert some of the inferred resource for the Mammoth seam into the higher confidence indicated category.