BlackGold gains 12.5% on proposed reverse takeover

Singapore

SHARES of BlackGold Natural Resources rose 12.5 per cent on Friday, after the Catalist-listed company proposed to acquire Tengri Coal and Energy (TEC) for a tentative S$1 billion - to be adjusted following an independent valuation.

TEC owns the entire issued and paid-up share capital of Tengri Petrochemicals (TPL), which in turns owns the share capital of Tsaidam Energy.

TPL holds licences to mine coal deposits, and Tsaidam Energy holds licences for the construction of power plants in Mongolia.

The counter hit an intraday high of 2.2 Singapore cents before easing to close at 1.8 Singapore cents, with 74.2 million shares having changed hands. That gives BlackGold a market capitalisation of S$16.3 million.

Data from ShareInvestor showed no married deals.

The company had requested a trading halt on Tuesday morning and lifted the halt on Friday before market open.

The independent valuation of TEC will take into account its power plant licence, offtake agreements, and mineral resources.

BlackGold intends to pay for the acquisition by issuing shares to TEC's owners, which will result in a reverse takeover of BlackGold.

BlackGold is an Indonesian coal miner. For FY2020, it reported a 13 per cent fall in sales to US$9.6 million. It reported a loss of US$4 million, against a loss of US$1.5 million in FY2019.

BlackGold did not provide details about the vendor of TEC, MGL Development.

Both BlackGold and MGL have agreed, however, that BlackGold will have an indicative ascribed value of S$202.5 million. This will be adjusted following an independent valuation.

As at Dec 31, BlackGold's net asset value provided in its financial statements was a negative US$9.9 million.

BlackGold said the proposed acquisition will expand its geographical footprint beyond South-east Asia and enable it to vertically integrate its coal supply chain from mining to electricity power supply.

Philip Soh, chairman of BlackGold, said: "Mongolia has attractive growth profiles that provide a good pipeline of organic opportunities in the mining and energy industry, which significantly enhances our future growth prospects.

"While continuing our resource-related activities in Indonesia, this acquisition is consistent with our strategy of pursuing growth, allowing us to create new value propositions to meet the growing demand of energy in our targeted markets."