Coronado shares climb after $230m Stanwell deal
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More news: Shares in Coronado Global Resources gained in early trading after the coal miner signed a five-year supply deal with Queensland government-owned Stanwell, in exchange for $230 million in near-term liquidity.
Coronado shares were up 5.4% to 19.5 cents at 11:25am AEST. The miner's shares have dropped 75% since the turn of the year but have advanced 85% in the last week.
Coronado strikes coal supply deal with Stanwell for $230m
The news: Coronado Global Resources has announced that electricity provider Stanwell Corporation will provide up to USD150 million ($230 million) of near-term liquidity to the miner in exchange for supplies of thermal coal.
The numbers: Coronado will provide Stanwell, which is owned by the Queensland state government, with up to 800,000 tonnes of thermal coal per year over five years, commencing in 2027.
The deal takes Coronado's additional liquidity to USD300 million, after the company announced a USD150 million asset-based lending facility with US asset manager Oaktree Capital Management last week.
The context: Coronado said the arrangement with Stanwell is expected to result in "significantly lower costs", improved margins and cash generation for the coal miner.
The move is intended to support the company's liquidity position to "withstand the current low metallurgical coal price environment", it said.
What they said: "We expect that the additional liquidity, together with the confidence in production delivery and ongoing management actions to reduce cost and capital expenditure, puts Coronado in an improved position to weather the current, prolonged low-price environment and preserve the inherent value of our long-life, high quality metallurgical coal assets," said Coronado's chief executive Douglas Thompson.
The source: ASX
