Private equity firm EMR Capital may not be in a rush to sell its prized Kestrel coal mine in Queensland, but one sale that is believed to be currently on its agenda is that of its Ravenswood gold mine in the same state.
It is understood that EMR, which is run and co-founded by Jason Chang and chaired by Owen Hegarty, is in search of an investment banking adviser for a possible up-coming sale of the mine or an initial public offering.
EMR Capital led a consortium that purchased Ravenswood in 2020 from Resolute Mining for up to $300m.
It is believed that EMR Capital is weighing either a full or partial asset sale.
Previously, EMR Capital has worked with Macquarie Capital, the investment bank that floated its copper miner 29Metals, comprising the Western Australia-based Golden Grove and Queensland-based Capricorn Copper mines.
Morgan Stanley was also involved in that transaction, which was a dual track process.
29Metals will soon be run by a new chief executive, with the miner announcing on Tuesday that Peter Albert was retiring in April and will be replaced by James Palmer.
Since taking ownership of Ravenswood, EMR Capital has grown production to about 200,000 ounces per annum.
At the time of the acquisition, the mine was believed to require heavy investment for life extension that would take production to 200,000 ounces of gold a year for 15 years from 2022.
The payment at the time of the full $300m was conditional on various investment outcomes.
Last year, the Queensland Government officially opened the new gold mine, 130km southwest of Townsville.
A $350m expansion made it the largest in the state, supporting 430 jobs and a further 220 permanent contractors.
The three-year expansion included a new tailings storage facility, crusher and a processing plant expansion including a new mill and leaching tanks.
The market has been paying close attention to EMR Capital with respect to its intensions for its Kestrel coal mine after South32 and BHP both recently received top dollar for quality metallurgical coal assets.
However, the expectation is that EMR Capital will wait until the obvious buyers digest their recent acquisitions, including Whitehaven Coal with the two coal mines in Queensland, Blackwater and Daunia, and Golden Energy with South32’s Illawarra Coal.
Working in EMR Capital’s favour is that the gold price has held up strongly of late.
Kestrel is the world’s largest underground coking or metallurgical coal mine, producing about 7.1 million tonnes of coal annually which is used to make steel throughout the world.
It is located in Queensland’s Bowen Basin, 51km northeast of Emerald.
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