PERTH (miningweekly.com) – ASX-listed Leigh Creek Energy has announced a A$21.85-million capital raise to fund its precommercial in-situ gasification (ISG) demonstration facility at its Leigh Creek project, in South Australia.
The company on Thursday told shareholders that it would place some 150-million shares at a price of 14.6c each to a cornerstone investor, as well as to sophisticated and professional investors.
Leigh Creek has signed a subscription agreement with Hong Kong-based China New Energy (CNE), which will buy 136.3-million shares in Leigh Creek, to raise A$20-million.
The CNE placement will be conducted in three tranches, with the issue of the last 83.5-million shares subject to shareholder approval. On completion of the third tranche, CNE will hold a 32.78% interest in Leigh Creek and will have the right to appoint a director to the company’s board.
In addition to the CNE placement, a further 13.7-million shares, priced at 13.5c a share, will be issued to sophisticated and professional investors, to raise the remaining A$1.8-million.
The funds will be used to invest in the Leigh Creek energy projects and will fund the construction of the precommercial demonstration facility. The facility is the first phase of the Leigh Creek project, which sits within the existing Leigh Creek coal mine area.
The project will see the development of deep coal resources, with energy to be produced from ISG and transported through a new pipeline into the existing east coast pipeline network.
Leigh Creek executive chairperson Justyn Peters said on Thursday that the investment by CNE underpinned the financial viability of the project and represented a significant positive step in the development of the Leigh Creek energy project.
“This major derisking of the project is a significant achievement,” he said.