Australian Pacific Coal Ltd (ASX: AQC) is an ASX-listed coal mining company that explores, develops, and produces coal for thermal and metallurgical uses. Dartbrook, Cooroorah, Mount Hillalong, and Mantuan Downs are just a few of the various projects.
The Dartbrook mine in the Hunter Valley, New South Wales, has been acquired by AQC from Anglo American and Marubeni.
The Dartbrook Project is between Aberdeen and Muswellbrook in the Hunter Valley, NSW. Major mining firms in the area use the Dartbrook location because it provides easy access to the world-class infrastructure, skilled labour force, and ancillary industries used to service vital consumers in Asia.
AQC holds an essential portfolio of coal exploration tenements in Queensland’s Bowen, Galilee, Surat, and Clarence-Moreton basins.
AQC stock skyrocketed to gain 103% on Wednesday after the company received a bid from Nathan Tinkler to buy the company at $1 per share.
AQC: 1H22 Key Financials
AQC shares are trading at $0.68 and have soared more than 103% on Wednesday morning. The current market cap of the company is 33.82 Million AUD.
- AQC’s revenue in the first half was $127.24K declining by more than 40% Y/Y.
- EBITDA of the company was $1.8 million in 1H22.
- The company’s operating expense was $2.46 million, declining by 43% Y/Y.
- The company reported a net loss of $6.38 million in 1H22, improving its loss by 44% compared to 1H21.
- As of the first half, the company had cash and cash equivalent of $$622K.
AQC: What is causing the Sudden Spike?
On Wednesday, the news hit the market that Pacific Premium Coal Pty Ltd (PPC), a company connected to Nathan Tinkler), made a non-binding indicative offer to buy AQC for $1.00 per share. This puts the company at a total valuation of $50 million. The proposal was contingent on several events, including either:
(a) an agreement between AQC and the Trepang Parties to convert the Trepang Debt into a direct 40% stake in Dartbrook on terms acceptable to PPC, or
(b)If that failed, then PPC’s would pay all outstanding debt to the Trepang Parties, given that no details of the source of financing have been provided.
Once wealthy, thanks to the coal boom of the 2000s and 2010s, Tinkler had become bankrupt and barred from managing businesses due to rising debt and charges that he disregarded directors’ obligations, particularly by failing to prohibit firms from operating while insolvent.
However, the period of his suspension ended last year, and he is eager to resume his career. By a strange turn of events, Tinkler had worked for Australian Pacific Coal before, for a short period in 2015, when APQ acquired Dartbrook from Anglo American for $25 million.
AQC: Coal’s Popularity has not diminished.
But for the time being, coal is still popular, and producers are planning expansions despite resistance from regional and national environmental organisations.
Despite intense opposition from local Hunter Valley thoroughbred horse breeders, the Dartbrook coal mine was given a 10-year extension to continue operating until 2027. The mine was the site of many mining-related fatalities more than 15 years ago.
To rescue financially troubled owner Australian Pacific Coal, a consortium headed by Nathan Tinkler has offered $50 million, or $1 per share, for the company. This is three times the offer made by coal dealer M Resources (ASX: AQC).
The coal industry is presently reaping record profits of billions of dollars; therefore, the goal is to get the plant functioning before prices fall again.
ADC: How Should the Investor Play this Coal Stock?
With shares having increased by 103%, there is a possibility that the offer might be withdrawn (as was the case with Appen (ASX: APX) only recently). Shareholders should take advantage of the opportunity to leave the firm at this time.