NHC - New Hope Corporation

grace said:

Laurie, don't follow, but that price is pretty amazing. Is this one of the unloved holdings that New Hope picked up many years ago?

I guess coal stocks will have a nice run tomorrow then!

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laurie said:

The world's biggest miner BHP Billiton Ltd says it has struck a deal to acquire 100 per cent of the New Saraji project from New Hope Corp Ltd for $2.5 billion cash and $1.2 billion worth of BHP shares in a 50/50 joint venture with Mitsubishi Corp.

"This acquisition is consistent with our strategy to accelerate growth in long life, low cost natural resources with a focus on delivering shareholder value," said BHP Billiton coal president Dave Murray.

New Saraji is an undeveloped metallurgical coal resource located next to the joint venture's Saraji mine near Dysart in Queensland's Bowen Basin.

"New Saraji has extensive high quality metallurgical coal resources," said Mr Murray.

"Subject to the results of further resource exploration and evaluation program to be undertaken by BMA, New Saraji has the potential to be developed into a large scale, high quality metallurgical coal operation."

"New Saraji could also potentially deliver significant synergies due to its proximity to BMA's existing Saraji mine," Mr Murray said.

The acquisition is likely to be scrutinised by regulators and third parties, BHP said.

Before the announcement, BHP shares closed down 4.4 per cent at $37.55

Fantastic news $$$$$$$$$$$

cheers laurie

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laurie said:

Stuff my dog!! what does it take to move this up
BHP are gonna pay $3.7Billion made up of $2.5Billion cash + $1.2Billion in shares

yet it has rallied back to open price!

cheers laurie

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grace said:

Do you realise that BMA gave the lease up in 2000 because it was in excess of requirements, only to buy it back 8 years later for Billions.

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YOUNG_TRADER said:

Really? wow how much did they sell it for? or did they just relinquish it back to the Qld Govt?

If they just relinquished it someone needs a big slap on the wrist

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grace said:

Well, yesterday's CM says

"Meanwhile, as BMA was finalising the purchase of New Saraji - which it ironically relinquished in 2001 after deciding it was surplus to requirements..."

The big mining players spruke of predictions for decades, yet this is a prime example of BMA (BHP Mitsubishi Alliance) not getting it right, within a 7 year time frame, and costing them 3.7 billion! Ouch.

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laurie said:

This is turning to be a cash cow for me as far as dividends are concerned 3.5c normal and a special .8c on top of that making a interim payment of .115c

cheers laurie

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Outlook
The sale of the New Saraji Project further strengthens the balance sheet after the expected return
of dividends to shareholders. New Hope is investing in the necessary infrastructure to support
the expanded New Acland operations via the Wetalla pipeline and the expanded QBH operations.
The re-commissioning of the Jeebropilly Mine and the possible extension of the New Oakleigh
Mine will add to our export production in the next few years. The combined total coal production
for the coming year is likely to be in the order of 4.9 million tonnes. New Hope has well priced
contracts to support the increased production.
The Lenton Project (coking and thermal coals) will be further evaluated to determine the best
development path during the next few years. A number of alternative strategies are being
evaluated with port capacity being a possible development constraint before 2010.
The exploration portfolio remains strong with good indications of additional coal resources which
could be suitable for export and or conversion fuels in the Downs Project. Bee Creek remains a
region of special interest for coking coals and will be drilled during the next 12 months as drilling
rigs become available.

If coal conversion trials prove successful, subject to engineering and feasibility studies, New
Hope is well positioned to economically deploy these technologies to shareholders advantage.
A very strong balance sheet allows New Hope to plan its future projects with confidence and the
company is well positioned to take advantage of any acquisitions which allow it to leverage its
strengths.
Capital Management
Significant earnings growth should continue in the 2009 financial year as coal prices are expected
to remain strong, supported by the company's incremental mine expansions and extensions.
Operating profit after tax for 2009 is likely to be in the range of $125 million to $150 million,
subject to the continuation of the strong international coal price and the volatility of the A$/US$
exchange rate and any other unforseen circumstances.
Proceeds from the $2.45 billion sale of the New Saraji Project have been placed on deposit with
major Australian banks. Interest revenue earned on these term deposits will add significantly to
New Hope’s 2009 profit result and will be in addition to the projected operating profit for 2009
mentioned above.
A special dividend of approximately $600 million will be paid to shareholders in conjunction with
the final 2009 year dividend in November 2009.
The timing of this special dividend coincides with income tax on the sale of the New Saraji Project
of approximately $725 million being payable at the time and lodgement of the Company’s 2009
financial year tax return in late calendar year 2009. This will allow the special dividend to be fully
franked in the hands of the shareholders.
“In deciding on paying a special dividend next year, the board has taken into consideration the
company’s ongoing capital requirements and the need to continue to actively pursue new
investment opportunities in the energy sector,” Mr Millner said.

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