Jeanette Fitzsimons writes:
If you’re one of those lucky Bathurst shareholders whose shares have just bounced back up to 18.2 NZ cents (previously was well over $1) you have just been offered a great opportunity to buy more. What’s more, you can buy them at the discount price of AUS 15c, up to a total value of AUS $5.4m. I imagine you’ll be racing to do that.
Bathurst seems to need money. Recently they conducted a capital raising seeking $20m in new shares from the public. They weren’t allowed in sharemarket rules to raise more than that – determined by a proportion of their current total share value. They froze trading for a day while people rushed to take up this opportunity then froze a second day while they tried again. Eventually they got $18.9m. Hope springs eternal I guess – among share traders as well as mining companies.
The reason for this hunger for capital is that they think they are close to getting consent to develop a new open cast mine on the Denniston plateau, home to unique sandstone wetland ecosystems with stunted vegetation, rare geckos, giant snails and kiwi, virtually predator-free. And not just one mine: they plan this to be the first of several, virtually covering the plateau with big holes, targeting some 84 million tonnes of the dirty black stuff.
They are somewhat lacking in the folding stuff because environmentalists have opposed their plans in the courts and held them up for a disgraceful 2 years. Meanwhile their Cascade mine on the edge of that plateau has run into expensive trouble and is delivering little coal, as we hear the new area of coal they moved into turned out to be deeper and thinner and less accessible than expected, and the roads they built were so steep they were banned from using them for safety reasons.
The Escarpment mine on Denniston will take a lot of capital to develop. They need roads, a processing plant, transport infrastructure and removal of the useless “overburden” (that’s the mining name for the biosphere) before they get any coal. Then when they do, they have to pay L&M, from whom they bought the mine, two lots of $40m before they can take much for their long-suffering shareholders.
Their money in the bank seems to amount to $20m. They have a loan facility with Westpac and recently defaulted on some aspect of the agreement (we don’t know what) and Westpac converted it from a term loan to an on-call provision.
No wonder they need money. But if you are a NZ shareholder and want to help them out – sorry, you can’t. This fantastic offer is only available to Australian shareholders. So much for pretending to be a NZ company.
Perhaps we should be grateful – New Zealanders don’t need to get their fingers burnt any more by the mining giants with their preposterous schemes. We have already used millions of tax payer dollars to support Solid Energy’s briquetting boondoggle in Mataura which after 18 months still doesn’t work. If Australians can be found to lose their cash – well, that’s their problem.