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Geo Energy Resources is close to completing an enduring piece of infrastructure that is expected to reliably generate lots of cash. As Geo Energy notes: "At full operational capacity of around 50 million tonnes of haulage per annum, the MBJ Integrated Infrastructure is targeted to generate up to an additional US$300 million in EBITDA per annum for the Group within a few years’ time, reflecting its scale, cost efficiency and commercial potential". |
| Substantial shareholder invests in MBJ |
Resource Invest AG (ResInvest), a Swiss-based private commodities investment company that already holds a 5.36% interest in Geo Energy, has signed a binding term sheet to make a substantial investment into MBJ.
ResInvest obviously knows the industry well, and has agreed to value the MBJ infrastructure business alone at US$1.5 billion.
Geo Energy’s total market capitalization only recently crossed the S$1 billion mark.
| Largely undervalued |
 "With a substantial investment into MBJ at a valuation of US$1.5 billion, which represents only one asset within the Group’s larger asset portfolio, we believe that Geo Energy shares are still largely undervalued given the significant intrinsic value across our broader asset base not reflected in our current share price".-- Charles Melati, Executive Chairman & CEO, Geo Energy |
Yet, a sophisticated industry player has valued just one key component of Geo's broader asset portfolio at US$1.5 billion.
ResInvest intends to invest either directly through shares of MBJ or indirectly through Geo Energy, by way of acquisition of existing shares or issuance of new shares.
The amount, percentage holding, and other details are to be finalised in the definitive agreement, targeting to comprise an initial investment in 3Q2026 and the remainder in 1Q2027.
"Whilst the amount will be finalised in the definitive agreement, the amount in discussions is considered to be substantial," noted Geo Energy.
The MBJ infrastructure is poised to be an significant economic engine. It will allow Geo's own TRA coal mine—which boasts 2P reserves of more than 300 million tonnes and a mining life of more than 20 years—to progressively ramp up production to 20 to 25 million tonnes annually.
Better yet, it creates a toll-based business model. Through TRA, Geo Energy is looking to become a significant cash-producing, long-term asset that the broader market currently has mispriced. |
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→ See also:GEO ENERGY at S$1 Billion: Peak or New Baseline?
