Back to where it began for Acacia and Riversdale team….Plus, Encounter sets tongues wagging with its Telfer play.
Junior miners with sub-$10 million market caps going in to a trading halt pending a “material’’ announcement is a daily occurrence. More often than not the so-called material announcement turns out to be a bit of fizzer. Red faces all around.
But every so often the claim of materiality holds true. And that is what is expected with a little thing called Acacia Coal (AJC) which has gone in to a trading halt pending the release of a preliminary feasibility study into its Riversdale anthracite coal (RAC) project in South Africa.
The name Riversdale is a clue to why there is interest in the PFS. RAC was an original project brought to the market in Riversdale Mining.
Riversdale went on to make a name for its self in coking coal in Mozambique, so much so that Rio Tinto paid $3.9 billion to take it over in 2011. Poor old Rio wishes it hadn’t, but that’s another story.
Key members of the management team behind the original Riversdale kept their eye on the RAC project, which had become very much a secondary asset in the Mozambique-focussed Riversdale for which Rio paid a hefty price.
And as luck would have it, they were able to acquire RAC, vend it into Acacia last year and then install themselves as managers of the company. Top quality anthracite – a smokeless coal with low volatiles and a high fixed carbon content – is used as a reductant in the metallurgical extraction process.
And because South Africa is not blessed with abundant premium (low phosphorus and sulphur) coking coals, anthracite has become the rainbow nation’s dominant reductant in some key metallurgical extraction industries (chrome, manganese and mineral sands). The joint is hooked on the stuff but potential new supplies of quality material, in what has become a tight supply market because of the exhaustion of existing mines, are thin on the ground.
Acacia reckons RAC is the answer. Second guessing what is going to be in the PFS has been the subject of much banter around the traps. And given Acacia is in a trading halt, it can’t hurt to add to the banter here.