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Goldman Sachs values IPO candidate Riversdale Resources
· Joyce Moullakis
ASX aspirant Riversdale Resources has received an equity valuation of $723 million to $1 billion from analysts at broker Goldman Sachs.
In research sent to potential investors on Monday morning, and obtained by Street Talk, Goldman bases its valuation of the coal play on two assumptions.
They are its view on the long term coking coal price and the 20-year average coking coal price.
Goldman is managing Riversdale's initial public offering alongside Deutsche Bank.
This column flagged last year that well-known resources duo Michael O'Keeffe and Steve Mallyon were ramping up preparations for Riversdale (Mark II) to have a first quarter run at the ASX.
Riversdale, while incorporated in Australia, has operations in Canada. Its main asset is the Crowsnest Pass Complex, which includes The Grassy Mountain coking coal development project, a freehold package of land, and other tenements including Adanac, Lynx and Bellevue in Alberta, Canada.
Goldman Sachs analyst Craig Sainsbury told clients the Grassy Mountain project was projected to produce 4.5 million tonnes of coal a year, starting from 2021.
"The development of Grassy Mountain will be one of Canada's largest coal developments in recent years, and will represent a rare independent pure coking coal producer."
The company is expected to seek to raise about $100 million for its initial public offering.
Monday's analyst research kicks off Riversdale's run at the ASX-boards. It is the first $100 million-plus IPO in front of investors this year.
Investors will remember O'Keeffe and Mallyon for the bumper $US4 billion sale of their Mozambique-focused Riversdale Mining to Rio Tinto in 2011.
While the acquisition proved disastrous for Rio it was highly lucrative for O'Keeffe and Mallyon.