Paringa Resources Appoints Todd Hannigan as CEO

Published: November 15, 2016 |

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Paringa Resources Limited has appointed Todd Hannigan as chief executive officer.

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 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,” said Todd Hannigan, chief executive officer of Paringa.

“We are highly fortunate that we are located in the best performing coal basin in the USA — 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 rationalize 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,” added Hannigan.

“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 Mtpa Poplar Grove Mine during 2017. Critically, this initial mine development is already underpinned by a five year coal supply contract that minimizes market risk and provides a clear pathway to strong, predictable free cashflow, as well as exposure to substantial upside as the production profile increases,” said Hannigan.

“Once Poplar Grove is established, we will then make low risk, low cost modular mine expansions aiming to grow our production to over 6 Mtpa. 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,” added Hannigan.

“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,” concluded Hannigan.

Hannigan and Todd were formerly the chief executive officer and chief financial officer respectively of Aston Resources Limited. 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 $855 million in debt and $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 $5 billion.

About Paringa
Paringa Resources Ltd is an emerging US based energy provider developing the high margin, low capex Buck Creek Mining Complex located in the growing Illinois Coal Basin.

To stop by Paringa’s website, CLICK HERE

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