Ground Breakers: Battle of Dartbrook ends with Tinkler on the outer as Trepang, M and Tetra seal AQC coal deal

The battle of Dartbrook looks to be over, with Trepang, Tetra and M Resources sharing the spoils in the bid to redevelop the mothablled coal mine
Nathan Tinkler’s $1 per share bid for control of AQC will not go ahead
Materials stocks rally, gaining 2.22% in morning trade

Nathan Tinkler started it all, but he looks to have been left on the roadside as the corporate feeding frenzy over Australian Pacific Coal (ASX:AQC) appears to have just about wrapped up.

Like this year’s AFL Grand Final at quarter time, the battle for control of the Dartbrook coal mine is all over bar the shouting, with each of M Resources, Trepang Services and Tetra Resources collecting a piece of the pie.

The prize is a stake in one of the few sanctioned and undeveloped coal assets in the country at a time when prices for the energy commodity have been driven to record highs.

The new deal will see M and Tetra, who each had competing proposals to develop Dartbrook with heavily indebted AQC, each claim a 20% stake in the mine via a joint venture deal.

Nick Paspaley’s Trepang, which held all the cards given it owned the bulk of AQC’s debt and purchased the land where Dartbrook sits last year, will extend its existing access and compensation agreement for a 10% interest, leaving the company with half of the mine.

AQC wants to be up and running by late next year at the Muswellbrook operations, where it received approval to keep mining out to 2027 earlier this year, to capture current super high prices for thermal coal.

If M and Tetra can’t get the operation off the ground within 27 months, their interest will revert to AQC.

Australian Pacific Coal (ASX:AQC) share price today:

What of the Tinkler?

Back on September 7 AQC shares went soaring after Nathan Tinkler, whose last name honestly sounds like a poorly conceived Batman villain and I just noticed it, offered a strapping $1 per share in a non-binding indicative proposal through an entity called Pacific Premium Coal.

That was three times the previous highest takeover bid from one M Resources, which unsurprisingly sent shares in the junior soaring.

Given one of its conditions related to an unrequited deal for Trepang to convert its debt into a 40% ownership stake in Dartbrook, that one’s now off the table, with long suffering minority shareholders unsurprisingly disappointed, sending its shares 14.14% lower today.

AQC’s presumably exhausted board can also breathe a sigh of relief that Trepang’s proposed board spill will no longer take place, with M and Trepang getting the right to appoint one and two new directors respectively.

If they can get Dartbrook off the ground — it hasn’t operated since 2006 and closed with an invidious safety record — AQC could well be a big bolter next year.

One only needs to look as far as recent junior coal start ups and turnaround stories Bowen Coal (ASX:BCB) and Terracom (ASX:TER) to see the value creation junior coal stocks have enjoyed during this year’s boom.

Bowen is up more than 100% year to date while Terracom has lifted some 395%.

Other coal stocks rule the roost on the market today, with Whitehaven (ASX:WHC) up more than 6% after a tough day for mining and energy companies yesterday.

Mineral Resources (ASX:MIN), Pilbara Minerals (ASX:PLS) and Allkem (ASX:AKE) were all backed to the hilt by investors in the lithium cos.

IGO, BHP, Rio and Fortescue were all heavily in the green to lead a commodities rally, with the materials sector up 2.22%.