Page 13 - AsiaElec Week 15 2021

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BlackGold set for $1bn reverse takeover of

Mongolia’s Tengri Coal and Energy

MONGOLIA SINGAPORE-BASED BlackGold Natural gain market access to resource-rich Mongolia.
Resources has entered into a non-binding term Commenting on the Group’s proposed acqui-
sheet for the proposed acquisition of the entire sition, Philip Soh, chairman of BlackGold, said:
issued and paid-up share capital of Mongo- “This is a transformational acquisition for Black-
lia’s Tengri Coal and Energy (TEC) from MGL Gold and it will enable us to establish a strong
Development (MGL) for $1bn via a reverse take- business platform and gain market access in one
over, BlackGold announced of the world’s most resource-rich country. Mon-
TEC owns the entire issued and paid-up golia has attractive growth profiles that provide
share capital of Tengri Petrochemicals (TPL), a good pipeline of organic opportunities in the
which holds mining licences issued to mine coal mining and energy industry, which significantly
deposits in Bayan soum, Tuv province, Mongo- enhances our future growth prospects. While
lia. In addition, TPL’s wholly-owned subsidiary continuing our resource-related activities in
Tsaidam Energy holds licences for the construc- Indonesia, this acquisition is consistent with our
tion of power plants and energy facilities in strategy of pursuing growth, allowing us to cre-
Mongolia. ate new value propositions to meet the growing
The purchase price of $1bn shall be adjusted demand of energy in our targeted markets.”
based on an independent valuation of TEC and
assets held by the group (including its power Philip Moynagh, CEO of the energy business
plant licence, offtake agreements and indicated at TEC, says “[TEC group’s] assets include over
and inferred mineral resources) to be commis- half a billion tonnes of coal, licences and designs
sioned by BlackGold. for state of the art power plants, licences and
Under the term sheet, it is also agreed that designs for thousands of kilometers of trans-
BlackGold shall have an indicative ascribed mission infrastructure, offtake agreements
value of $202.5mn, to be adjusted based on an for the generated electricity, construction and
independent valuation of BlackGold and assets debt agreements with Chinese state owned
held by the company to be commissioned by enterprises, and equity agreements with a US
BlackGold. investment company. The first 600MW project,
New ordinary shares in BlackGold will be a $860mn capital expenditure project, is now
issued to MGL to satisfy the purchase price, ready for groundbreaking.”
calculated based on the final ascribed value of Since 1991, Mongolia has tripled its GDP
BlackGold divided by the number of shares in per capita. Vast quantities of untapped mineral
issue immediately preceding completion. resources in Mongolia have made the country
Following the transaction, MGL will become attractive for foreign investments, boosting the
the controlling shareholder of the BlackGold. country’s economic growth over the years.
BlackGold added that the proposed acqui- According to Mongolia’s energy ministry,
sition will enable the group to diversify and around 80% of the electrical supply is produced
expand its geographical footprint beyond South- domestically and 20% is imported. Coal is the
east Asia, while also allowing the group to verti- primary source of electricity generation in Mon-
cally integrate its coal supply chain from mining golia, accounting for an estimated 85% of the
to electricity power supply. total electricity generation in the country. Since
Philip Soh, chairman of BlackGold, said that 1990, energy consumption in Mongolia has
the acquisition would be transformational for increased 124.62% to reach 7.3 terawatt hour in
BlackGold and it would enable the company to 2018. ™

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