Iluka Resources Limited (“Iluka”) today announced that it has agreed to divest to Xstrata Coal its 50 per cent non operated interest in the Narama thermal coal mine, located in the Hunter Valley of New South Wales.
The sale consideration is approximately $53 million, subject to any final completion adjustments. Iluka will continue to receive the earnings contribution from Narama through to the end of the 2007 contractual year, with sale completion and payment of proceeds expected to occur early in 2008. The transaction is conditional upon no material adverse changes occurring prior to the end of the 2007 contract year. The book value of Iluka’s 50 per cent of the Narama net assets was $22.7 million as at 30 June 2007.
Iluka’s Managing Director, David Robb, advised at the time of the company’s full year results in February 2007 that the company was investigating options for the divestment of the Narama coal assets.
“Narama is, for Iluka, effectively a passive annuity style asset, with a limited remaining economic life. Proceeds will be used to strengthen balance sheet flexibility to support new growth opportunities in our minerals sands business, including the Murray Basin in Victoria/New South Wales and the Eucla Basin in South Australia ”, said Mr Robb.
The sale complements other balance sheet initiatives, including the implementation of a fully underwritten dividend re-investment plan and capital expenditure reductions, as well as the development of a revised funding strategy to underpin the company’s medium term growth plans.
Investment market and media inquiries
Dr Robert Porter General Manager, Investor Relations and Corporate Affairs Phone: + 61 8 9360 4751 Mobile: +61 (0) 407 391 829 Email: [email protected]
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