Polo Resources says Peabody to buy 50 pct in Mongolian JV

Jan 28 • Mining • 601 Views • No Comments on Polo Resources says Peabody to buy 50 pct in Mongolian JV

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Jan 27 (Reuters) – Coal miner Polo Resources Ltd (3PO.L) said on Tuesday Peabody Energy Corp (BTU.N) agreed to acquire up to a 50 percent stake in a joint venture formed to hold its Mongolian coal and mineral interests, sending its shares up as much as 35 percent.

Peabody, the world’s largest private sector coal company, would pay $73.2 million in cash if all options are exercised, Polo Resources said in a statement.Peabody would also get warrants to buy up to 15 percent shares in Polo Resources, which received an unsolicited offer approach from private equity firm Denham Capital on Monday. The warrants have an exercise price of 3.5 pence per share and the transaction is expected to close during the first quarter, it said.

“This alliance will provide the mining expertise and funding required to develop our existing asset base and unlock the currently unrecognized value of Polo’s Mongolian interests,” Executive Chairman Stephen Dattels said. Peabody’s coal products fuel about 10 percent of all U.S. electricity generation and 2 percent of worldwide electricity.

“A joint venture with Polo’s existing platform will accelerate the development of Peabody’s presence in one of the world’s premier undeveloped coal regions,” Peabody Chief Executive Greg Boyce said. Polo Resources shares were up 25 percent at 3.6 pence at 0905 GMT. They touched a high of 3.875 earlier in the session.

Sources: Thomson Reuters

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