atrum coal may ipo

Found this article circulating.... Atrum Coal IPO coming up in May.

Atrum IPO to Spotlight US Coal Export Potential to Asia
By David Winning, Wall Street Journal

Shale gas may be eating into coal demand in North America, but that’s not slowing interest among Australian companies in growing coal exports from the continent to Asia.

Atrum Coal aims to raise 10 million Australian dollars (US$10.4 million) in an initial public offering on the Australian Securities Exchange toward the end of May. It plans to use the proceeds to further explore and develop reserves of hard coking coal and anthracite in Canada’s British Columbia province.

The Perth-based company held a roadshow for investors last week and the positive response encouraged management to up the targeted raising by 25% from A$8 million. It has engaged Blackwood Capital as lead equity manager for the IPO and aims to lodge a prospectus with the ASX in the middle of this month.

North American coal has come to the fore as an attractive investment for Australian entrepreneurs who previously favored developing big deposits at home in Queensland and New South Wales states or venturing into Africa instead.

Driving this shift is the rapid consolidation among Australian miners with producing coal mines, new levies on carbon emissions and coal-mining profits, and infrastructure constraints that are crimping the ability of operators to take full advantage of rising coal demand in Asia, especially China.

“About a year and a half ago we saw this infrastructure bottlenecking that we’ve got in Australia along with the carbon tax and competing land use issues,” Russell Moran, Atrum Coal’s executive director, told Deal Journal Australia. “We decided to go somewhere else and British Columbia was a bit of a no-brainer as it still has some surplus port and rail capacity, and really high quality coal there.”

Australian investors are warming to this theme as more North America-focused coal miners consider listing on the ASX, backed by management who have chalked up major successes in other regions. Steve Mallyon and Michael O’Keeffe–the management duo behind Riversdale Mining–acquired coal tenements in Alaska earlier this year in their first deal since selling the Mozambique-focused coal miner to Rio Tinto for A$4 billion last year.

Ambre Energy, led by Edek Choros, has also engaged advisors ahead of a proposed initial public offering on the ASX in the middle of this year that may value the miner with U.S. coal assets at up to A$1 billion.

They are not the only ones. Shares in Coalspur Mines, which is developing a coal project in Canada’s Alberta province, are worth five times more now than at the start of 2010. County Coal—chaired by Bob Cameron who was in charge of NSW-focused Centennial Coal when it was sold to Thailand’s Banpu in 2010—has seen its stock nearly double in value right after listing in November last year.

Atrum Coal’s main asset is the wholly owned Groundhog Project in British Columbia, which has a JORC-compliant inferred resource of 50 million tons and an exploration target of between 350 million and 400 million tons.

Mr. Moran says the goal is to have a mine with an annual capacity of 2 million tons of coal in operation by 2015/2016.

Running through the project is a rail easement that extends to the north where another coking coal project is being developed by Fortune Minerals and South Korea’s Posco.

Mr. Moran says an early estimate of the cost of laying sleepers and heavy-gauge track to carry coal from the Fortune-Posco venture to an existing line running to the port of Vancouver or terminals at Prince Rupert is up to US$600 million. The likely scenario would involve CN Rail building the line and putting a surcharge on coal volumes moved from Atrum’s mines to port.

British Columbia is home to the closest ports in North America to Asia, cutting shipping time by up to 58 hours compared to other west coast ports, says Atrum Coal, which will likely be valued at over A$19 million following the ASX listing.

Atrum Coal is chaired James Chisholm, who co-founded The Chairmen1 Pty Ltd., which is the largest shareholder of ASX-listed Guildford Coal. The company’s directors also include former Zyl executives Eric Lilford and Gino D’Anna.

The company owns the smaller Naskeena project in British Columbia with targeted production of less than 500,000 tons annually and coal volumes moved by road, and two other exploration projects known as Bowron River and Peace River.

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