White Energy To Buy South Australian Coal Ltd

Deal Gives Access to 500mn Tonne Resource

New South Wales’ White Energy is to buy South Australian Coal Limited in a $A39.3 million all-share deal.

The deal will give White Energy access to SA’s 500 million-tonne coal resource at Lake Phillipson, about 60 kilometres south of Coober Pedy in the far north of the state.

White Energy MD, John Atkinson, says shareholders in SACL are reinvesting $100 million back into White Energy, which it will add to its overall funds.

"The key figures in the South Australian coal company are putting their money where their mouths are and that'll give White Energy in excess of $200 million and we'll then use funds to exploit the opportunity at Lake Phillipson and also exploit the opportunities in other coal markets," he said.

Lake Phillipson coal will also be benefit from processing by White Energy to enable it to be exported.

"That process takes high-moisture coal and effectively reduces the moisture content and creates a high-energy and high-value thermal coal out of what started as a high-moisture low-energy coal," he said.

SACL was spun-off from Felix Resources when Felix was taken over last year by Chinese state-owned Yanzhou Coal Mining last year.

Under the bid, SACL shareholders are being offered 0.07985 WEC shares for each share held. They could also receive an additional 21.61 cents per share if additional coal resources are defined in SACL's existing tenements.

Alternatively, SACL shareholders can receive 19.96 cents per share in cash, up to a maximum aggregate of all shareholders of $10 million.

SACL's independent directors have unanimously recommended the deal, in the absence of a superior proposal.