Executive Summary
Caledon Resources (LON:CDN) is a coal mining and production company. Based in Queensland, Australia, the company owns two mines in Bowen Basin: the Cook Mine, acquired in 2006, and Minyango Deposit, acquired in the same year. It has started coal production in the Cook Mine, and embarked upon a feasibility study in the Minyango Deposit. Caledonian Resources is listed on the AIM and ASX.
Company History
Caledon was formed in 2003 for the purposes of exploring for precious metals in China. The company had some success with regard to exploration and with its equity investment but the directors decided to transform the Group from an explorer to a producer of natural resources. Taking account of the Company’s significantly increased treasury funds following the disposal of its equity interest in Eldorado Gold Corporation, which had been acquired by the Company as consideration for the sale of the Company’s shares in Afcan Mining Corporation, and the Group’s other experiences in China, the Directors believed that opportunities brought to their attention when they were approached by MTP with a proposal to acquire undeveloped brownfield
coal assets in the Bowen Basin in Queensland, Australia, were the way forward for the company. The directors believed that the demand for coking coal from Asia would provide a continuing market. [1]
The company is quoted on the AIM at the London stock exchange and the Australian Securities Exchange. The company was admitted to listing in December 2006. The group has 220 employees and its Head Office is in Knightsbridge, London.
Current Events
In August 2009 the company confirmed that it had received approaches from Essar Minerals Ltd and other parties which may or may not lead to a cash offer for the company. Caledon have neither confirmed nor denied whether any agreement will go ahead at this current time. [2]
The half year results to 30 June 2009 reported that due to the dramatic downturn in the coking coal market early in the year the decision was taken to wind back productive capacity and reduce the workforce by almost a quarter to preserve cash. This not only increased unit costs but resulted in additional costs such as redundancy payments and take or pay penalties for under utilised rail and port capacity. The company believes however that the outlook is now much more encouraging as China…
