Paringa raises cash for US coal mine
PERTH (miningweekly.com) – Coal junior Paringa Resources would raise some A$5.1-million through a share placement to strengthen its balance sheet as it starts formal debt financing discussions for its Buck Creek No 1 mine, in the US.
The company said on Wednesday that it would place some 15-million shares, priced at A$0.34 each, to raise the funds. The placement was cornerstoned by Baobab Asset Management, which has extensive experience in the small resource sector, and would provide support to Paringa going forward.
“We have a very active year ahead and securing these high-quality US institutional investors is a very positive step for the company, which underlines the Buck Creek No 1 mine’s scale and potential to become one of the next strategic sources of premium coal in the US,” said Paringa president and CEO David Gay.
The issue price represented a 6.3% discount to the 30-day volume weighted average price of Paringa shares.
In addition, the company would also issue 7.5-million free attaching options, on a one-for-two basis, exercisable at A$0.50 each by the end of July 2018.
A recent prefeasibility study into the Buck Creek No 1 mine estimated that the project could deliver 5.2-million tonnes a year of run-of-mine product at steady-state production. The project would require an initial capital investment of $127-million to yield 3.8-million tonnes a year of saleable coal over a mine life of around 18 years.
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