New Hope Corporation has acquired a 15 per cent interest in Malabar Resources for a total investment of $94.4 million.
Malabar is an unlisted public company whose flagship asset is the Maxwell mine, an underground metallurgical coal project located 10km south-west of Muswellbrook in the Hunter Valley of New South Wales.
Construction of the project commenced in May 2022.
New Hope said the investment:
- aligns with the company’s strategy to invest its surplus cash into coal assets that are low on the cost curve with long life approvals
- adds meaningful equity tonnes at an attractive entry price investing alongside well respected founders who have a strong track record of developing coal projects and companies
- diversifies the company’s asset base by providing exposure to metallurgical coal mined by low impact, underground methods
- facilitates delivery of a project with strong technical and operational foundations and the ability to unlock value with the use of significant established infrastructure
- provides attractive investment returns over the life of the project with additional upside return opportunities from diversified enterprises including exploration and agricultural assets and the future development of an approved 25MW solar farm.
The move was pursuant to an equity-raising conducted by Malabar Resources in which it acquired 75,530,455 ordinary shares at $1.25 per share funded from existing cash.
The total equity capital raised of $250m, the equity raised by Malabar, together with existing cash of $22m, a$165m senior debt facility and $75m pre-payment facility, provides Malabar with more than $500m to fully fund the development of the Maxwell mine.
Mining leases for Maxwell were granted in November 2021 and the project has received final state and federal approvals. It has an estimated life of at least 25 years with more than 75 per cent of the product suitable for steelmaking.
Malabar’s assets also include:
- Approved 25MW Maxwell Solar Farm (stage one) located on more than 105 hectares of rehabilitated mine land within the NSW Government’s designated Hunter-Central Coast Renewable Energy Zone and with close proximity to high voltage network infrastructure, with the capacity to significantly increase large-scale solar generation and battery storage
- Spur Hill exploration project (EL 7429)
- Agricultural assets including the Merton Vineyard.
