Montem Resources completes IPO to develop Canadian steelmaking coal projects

Montem Resources IPO ASX MR1 Canada steelmaking coal Tent Mountain Mine
Montem has raised $8 million to help fund its planned restart of the Tent Mountain Mine, and explore the Chinook Project.

After completing an $8 million initial public offering, Montem Resources will list on the ASX next week aiming to establish itself as a supplier of Canadian coking coal to the global steel industry.

The company will have an implied market capitalisation of $50.7 million upon listing under the ticker ‘MR1’.

Montem closed its IPO last month – issuing 32 million shares at $0.25 each.

With well-known coal industry figure Mark Lochtenberg as chairman, and experienced coal miner Peter Doyle as managing director, Montem is bringing two previously operated coking (or steelmaking) coal mines and several greenfield projects to the market.

Its Canadian projects are in the Crowsnest Pass of south-west Alberta and have estimated resources of 209.2 million tonnes (3.7Mt measured, 151.9Mt indicated and 53.7Mt inferred).

The previously mined properties have had extensive exploration, while the greenfield properties also offer upside potential.

Lochtenberg and Doyle have 50 years’ combined experience in coal

Experienced in major coal companies, and developing junior miners, Mr Lochtenberg and Mr Doyle have each spent more than 25 years in the coal business.

Mr Lochtenberg was previously co-head of Glencore’s coal business unit, and founded Cockatoo Coal. Mr Doyle has worked in the coal industry in NSW and Queensland, as well as China, Mongolia and the US before becoming involved in this Canadian project.

Montem’s mines are located near operations run by Canadian giant Teck Resources – the second largest exporter of seaborne coking coal behind BHP (ASX: BHP). Nearby coking coal developers in the Crowsnest Pass include Hancock’s Riversdale Resources Grassy Mountain Project, and Atrum Coal’s (ASX: ATU) Elan Project.

Montem plans to restart the Tent Mountain Mine, which closed in 1983 due to poor market conditions. Prior to its closure, the mine produced high quality hard coking coal that was exported to Japan for use in steelmills.

A definitive feasibility study for the Tent Mountain Mine is complete and Montem will use IPO funds to move the project to construction stage.

All clear for rail to carry coal to port

Mine permits and environmental approvals for Tent Mountain are active, but Montem requires operating licences and an amendment to the environmental approval before it can restart the mine. These are expected in 2021, with coal sales forecast for 2022.

Site infrastructure is in place, and Montem has secured land for loading coal on to railway wagons — Canadian Pacific (CP) railroad’s southern main line runs east-west through the Crowsnest Pass. Montem has secured access to the Westshore coal terminal in the port of Vancouver.

The majority of Canada’s export coal is shipped through coal terminals on the Pacific coast. At Vancouver are the coal terminals of Westshore and Neptune, while further north at Prince Rupert is the Ridley terminal. CP and Canadian National are the rail carriers.

Combined, the Pacific coast coal terminals have sufficient capacity to allow for significant expansion of coal exports. In 2018 they handled 45Mt with a capacity of 64Mt.

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