Coogee buys $7m East Rockingham site

Coogee has bought an industrial premise in East Rockingham from WA Kaolin for $7 million, with the mining group to lease back the premises.

WA Kaolin announced to the ASX that it would sell the Lot 3 Ward Road property to Coogee, excluding plant and equipment.

The miner bought the asset for $1.2 million in March 2004.

It said the latest transaction would improve its cash position by $5 million, and the sale would place the company in “an excellent financial position” to support its transition to full production at its Wickepin mine.

Coogee agreed to lease the property back to the kaolin miner for the next three years on a peppercorn basis, that is, $1 per annum.

In exchange, Coogee will have access to park vehicles, tanks and equipment on a section of the property, with further terms to be negotiated.

WA Kaolin chief executive Andrew Sorensen described the transaction as an excellent result for the company.

“As we continue to ramp up our production volumes at Wickepin, to be able to successfully negotiate the sale of our now non-core assets at Kwinana (East Rockingham) at above our book value, whilst maintaining favourable lease back terms, focuses the company’s capital towards the generation of cash flow from the production ramp up,” he said.

The deal has reduced WA Kaolin’s overall debt position to $23.4 million.

WA Kaolin also announced the existing $5 million loan with Boneyard Investments, which was secured against the property, would be repaid with the proceeds of the sale.

In addition, Kaolin will establish a new $3 million debt facility with Boneyard Investments.

WA Kaolin’s share price was up 3.45 per cent to 15 cents at the time of writing.