Malabar makes a play for NSW mine
PERTH (miningweekly.com) – Coal junior Malabar Coal plans to take over full ownership of the Spur Hill underground coal project, in New South Wales.
Malabar would pay A$3-million to its joint venture (JV) partner to increase its shareholding from the current 38.27% to 100% and would make a series of deferred payments totalling A$13-million on defined milestones, as well as granting the JV partner a 1.75% royalty on coal sales.
Under the previous JV agreement, Malabar had the right to earn an 80% interest in the project through spending A$30-million and paying a total of A$40-million to the JV partner.
Malabar on Tuesday announced a nonrenounceable entitlement offer to assist in funding the initial payment and the cost of the restructure, with the company to place some 75-million shares to raise A$6-million.
Under the entitlement offer, shareholders would be able to subscribe for 15 new shares for every 17 shares held, with the offer priced at 8c a share. The offer price represented a 23.81% discount to Malabar’s closing price on September 11.
Three of the company’s major shareholders have already committed to taking up their entitlement, amounting to more than 5.6-million shares, or 13.6% of the newly issued shares.
The entitlement offer would open on September 23 and close on October 8.
The proceeds raised would also be used to fund the planned exploration programme at Spur Hill and to fund working capital.
The Spur Hill underground mine has a Joint Ore Reserves Committee-compliant resource of 626-million tonnes and a probable reserve of 91-million tonnes.
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