Adani Group Agrees to Buy Out Linc Energy for $145 Million
India’s Adani Group (NSE: ADANIENT) has agreed to buy Linc Energy’s future revenue rights to the Carmichael coal project for $145 million.
The deal means Linc will walk away from a royalty of $2 per ton of coal over the first 20 years of the production at the mine.
"This agreement reflects Adani's confidence in the progress of Carmichael mine, which received final federal environmental approvals from the Australian government last month," Adani said in a statement.
"The agreement...underlines Adani's consistent commitment to ensure that the high-quality coal from the Carmichael mine is cost-efficient."
According to Linc Energy, Adani will pay the $145 million in two installments - $84 million in cash within five days and the remaining balance of $61 million in cash on or before 12 months from the signing of the Deed of Assignment and Assumption.
"It's more about us focusing our strategy into cashing up the balance sheet and driving towards a more focused outcome like drilling our shale in South Australia," chief executive Peter Bond said.
The company, which purchased the Carmichael project from Linc Energy in 2010, will obtain 100 percent of the rights to the project.
Analysts have agreed the buy out between Adani and Linc Energy is a win-win for both companies
"It means they (Adani) haven't given up," said Tim Buckley, a director of the US-based Institute of Energy Economics and Financial Analysis.
The massive $16 billion Carmichael coal project is an open cut and underground coal mining development in the north Galilee Basin of Australia. The mine, which will include a 189km rail infrastructure, is estimated to produce 60 million tons of thermal coal per year.
Although the project has endured unexpected delays, final approval was announced by Australia’s Environment Minister Greg Hunt last month.
Once in production, the project is expected to add $2.97 billion to Queensland economy each year.
Newmont acquires Canada’s GT Gold in $325mn deal
Newmont, the world’s biggest gold miner, has acquired Canada’s GT Gold in a deal worth $325mn. The gold giant now controls the Tatogga gold-copper project in the Traditional Territory of the Tahltan Nation.
“With the acquisition of GT Gold and the Tatogga project in the highly sought-after Golden Triangle district of British Columbia, Canada, Newmont continues to strengthen our world-class portfolio,” commented Newmont President and CEO Tom Palmer.
“We look forward to continuing to build a respectful and meaningful relationship with the Tahltan Nation, including the community of Iskut. The relationships we have with Indigenous communities, First Nations and host communities are critical to the way we operate. We will partner with the Tahltan Nation at all levels, and with the Government of British Columbia to ensure a shared path forward as the Company understands and acknowledges that Tahltan consent is necessary for advancing the Tatogga project.”
Newmont’s acquisition includes the Tatogga project, comprised primarily of the Saddle North deposit, which has the potential to contribute future significant gold and copper annual production. There are also further exploration opportunities beyond the known deposits at Saddle North within the land package. The Tatogga project adds to Newmont’s existing interest in the prospective Golden Triangle through the company’s 50% ownership in the Galore Creek project.
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. A world-class portfolio of assets, prospects and talent is anchored in favourable mining jurisdictions in North America, South America, Australia and Africa. The American miner is celebrating its 100th anniversary this month.
With gold prices on the rise, the last six months has seen gold industry M&A activity accelerating. A recent Mckinsey report, advises that the industry need to be mindful of mistakes made during the previous gold price boom, when growth was chased unidirectionally by several companies.