Cuesta Coal raises cash for Qld project
PERTH (miningweekly.com) – Coal developer Cuesta Coal has signed a share subscription agreement with major shareholder Longluck Investment to raise A$8.5-million to assist in developing its Moorlands project, in Queensland.
Under the terms of the subscription agreement, Cuesta would place about 82.5-million new ordinary shares to Longluck, a subsidiary of Beijing Guoli Energy Investments, at an issue price of 10.3c a share.
Beijing Guoli has also committed to a further A$6.5-million investment in Cuesta, through a second share placement, taking up a further 63.1-million new ordinary shares, also at an issue price of 10.3c a share.
The issue price represented a 10% premium to Cuesta’s 30-day volume-weighted average price, and a 15% premium to the company’s last trading price.
Both the placements were subject to shareholder approval.
MD Matthew Crawford said on Monday that the funding would significantly strengthen the company’s balance sheet and would allow Cuesta to continue towards achieving its development objectives at Moorlands, in particular the focus on advancing the definitive feasibility study.
“This is particularly pleasing given the challenging market conditions currently faced by emerging coal companies and the limited availability of funding.”
Following the completion of both placements, Beijing Guoli’s total investment in Cuesta would be A$47-million.
The Moorlands project currently had a Joint Ore Reserves Committee-compliant resource of 281.1-million tonnes, and first coal production had been targeted for 2016. Cuesta is to develop a 1.9-million-tonne-a-year opencut operation, with a mine life of 30 years.
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