Paringa Resources Ltd has appointed Todd Hannigan as CEO of the company, effective immediately. This role will complement the new role of Paringa’s existing CEO, David Gay, who will continue with the company as President and Executive Director.
In addition, Tom Todd will be appointed as Executive Director and Taso Arima will move to Non-Executive Director of the company.
Paringa’s new CEO, Todd Hannigan, said: “Paringa has an outstanding coal development asset – one that can be developed quickly at very low capital cost – but that also has valuable optionality to subsequently expand production and free cash flow through low cost, and low risk, modular mine expansions.”
“We are highly fortunate that we are located in the best performing coal basin in the US – the Illinois coal basin – which, despite one of the worst coal market downturns in the last 50 years, has still provided our nearest competitor, Alliance Resource Partners LP, the conditions and opportunity to consistently maintain EBITDA margins of close to US$20 per ton over the last five years. These remarkable margins, in direct contrast to other volatile and unprofitable coal markets, have been supported by structural market advantages that only continue to improve as weaker, higher cost, coal basins rationalise production and close unprofitable mines. And now, with higher international coal prices, rising US natural gas prices and falling coal inventories, the supply and demand fundamentals are starting to rapidly improve – which provides Paringa the perfect opportunity to enter this structurally advantaged market.”
He continued: “Our plan is simple – we intend to replicate Alliance’s successful strategy by developing low capital and operating cost mines located near low-cost river transportation. We will start initially with the low cost construction of the 1.8 million tpa Poplar Grove Mine during 2017. Critically, this initial mine development is already underpinned by a five year coal supply contract that minimises market risk and provides a clear pathway to strong, predictable free cashflow, as well as exposure to substantial upside as the production profile increases.”
“Once Poplar Grove is established, we will then make low risk, low cost modular mine expansions aiming to grow our production to over 6 million tpa. We will underpin this growth with long-term sales contracts to ensure that our investments are low risk, high return and generate high levels of free cash flow.”
Hannigan concluded: “We have already made excellent progress in discussions with a wide range of investment groups to fund this development plan – we will now accelerate these discussions and we aim to fully fund the Poplar Grove project to commence construction by mid-2017.”
Messrs Hannigan and Todd were formerly the CEO and Chief Financial Officer respectively of Aston Resources Ltd. During this period, they led the growth of Aston Resources from a small private company into one of Australia's largest publicly listed coal companies. Aston Resources raised a total of AUS$855 million in debt and AUS$1.1 billion in equity funding to acquire and fully fund the Maules Creek coal project through to first coal production. In 2011, Aston Resources merged with Whitehaven Resources Limited in a deal valued at over AUS$5 billion.
The board believes the appointment of a CEO with a strong track record of successfully financing and developing world-class coal projects is an important and timely step for the Company, as Paringa evolves from an emerging coal developer to Illinois Basin’s next mid-tier coal producer.
Read the article online at: https://www.worldcoal.com/coal/07112016/new-ceo-for-paringa-resources/
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