Introduction

Engaged for technical and financial due diligence for two operating coking coal mines plus a series of exploration level coal assets for the purposes of acquisition.

Mandate

The scope was for full due diligence on the operating coal mine, one underground and the other open cut along with fatal flaws analysis of the exploration assets.  

Approach

Palaris proposed to stage the operating mines review, initially undertaking a red flags review and indicative financial modelling before proceeding into full due diligence.  

Detailed due diligence included validation of the life of mine plan and forming and independent view of the most likely mine physicals and cost case. Opportunities for maximisation of the asset value and expansion opportunities were also considered within the review. Numerous operating scenarios were derived to assist the Client in understanding the asset operating risk. The reviews included not only the mines but associated infrastructure.  

Following due diligence the Palaris team worked closely with the Client on technical and financial aspects of the transaction including assistance to secure financing from a significant consortium of global banks for the acquisition.  

Outcome

The Client was successful in purchasing 80% of the underground mine for USD 2.25 billion. Palaris’ review identified material upside opportunities in productivity and utilisation as well as capital project to further lift the mine output 

Upon acquisition, Palaris’ P50 case was more than achieved within the first 12 months, with production levels nearing he P10 (upside) case.