Viking Ashanti's takeover offer of Auminco Mines reaches 56.62% acceptances

Ulaanbaatar /MONTSAME/ Viking Ashanti has reported Tuesday that acceptance for its off market takeover offer for unlisted Mongolian thermal and coking coal company Auminco Mines has reached 56.62%. According to news published at proactiveinvestors.com.au, this puts it on track to secure a package of advanced coal assets including the lead Berkh Uul in northern Mongolia next to a rail link that connects with Russian markets. Under the terms of the offer, which was launched earlier this month, accepting Auminco shareholders will receive 60.6 Viking Shares and 20.2 Viking Options for every 100 Auminco Shares held. Auminco shareholders will emerge with a 47% stake in Viking, and play a major role in the evolution of Viking as a participant in the Mongolian thermal and coking coal markets. The combined entity could become a producer of thermal coal within the next 12 – 18 months. Notably, Auminco was established by founding shareholders and management of Coalworks Ltd, which was eventually taken over by Whitehaven Coal (ASX: WHC) for around $200 million in 2012. Viking’s lead project, Berkh Uul, is located in northern Mongolia next to a rail link that connects with Russian markets, and provides quick access to domestic power plants and industrial users at Darkhan and Ulaanbaatar. Near term, low cost production is forecast, with a JORC resource of 38.3 million tonnes of high quality, open pittable unwashed bituminous coal. Development risk is considered lower than for most Mongolian coal companies as overall CAPEX for Berkh Uul is low by most standards; start-up mining rate will not be large, with flexibility to build over time with simple and proven mining and processing technology, thus reducing funding and execution risk.