SYDNEY, AUSTRALIA: Stanmore Resources Limited (ASX: SMR) completed the acquisition of BHP Minerals Pty Ltd’s 80% interest in BHP Mitsui Coal Pty Ltd, now renamed Stanmore SMC Pty Ltd, through the acquisition of all the shares in Dampier Coal (Queensland) Proprietary Ltd.

Stanmore’s wholly owned subsidiary, Dampier Coal, has signed a definitive share sale agreement with Mitsui & Co. (Australia) Ltd and Mitsui & Co., Ltd to acquire the remaining 20% interest in SMC held by Mitsui.

Following completion of the Transaction Stanmore will own 100% of SMC.

Commenting on the Transaction, CEO Marcelo Matos said: “Following the previous acquisition of the majority interest in SMC from BHP, this Transaction allows Stanmore to consolidate its position as a leading metallurgical coal miner in the Bowen Basin. Having 100% control of South Walker Creek and Poitrel, as well as Wards Well and other projects, allows Stanmore to maximise value amongst our assets in the region.”

The purchase price for the Transaction payable upon completion is US$380 million, and will be reduced by any dividends paid to Mitsui by SMC prior to completion. The Company anticipates that SMC will shortly declare and pay a significant dividend to its shareholders (Dampier Coal and Mitsui).

If paid prior to completion of the Transaction, such a dividend would reduce the purchase price for the Transaction payable to Mitsui. No other completion adjustments are contemplated by the Transaction.

Stanmore intends to fund the Transaction through internal sources. Based on current market conditions, Stanmore anticipates it will continue to have sufficient internal sources to meet all ongoing cash requirements and fund the Transaction without the need to issue any new debt or raise capital.

The Transaction is conditional on FIRB approval. Completion of the Transaction is expected in Q4 CY2022.

Stanmore has agreed to guarantee all obligations of Dampier Coal under the Share Sale Agreement.

The acquisition of the remaining 20% interest in SMC will allow Stanmore to achieve full synergies between the SMC operations and Stanmore’s other operations. From an accounting and tax perspective, it will allow SMC to join the Stanmore tax consolidated group and benefit from the associated efficiencies.

The Transaction also directly aligns with Stanmore’s investment strategy to streamline and develop its existing operations and maximise the geographical synergies from its existing infrastructure.