CoAL raises $44.8m in equity placementComment on this story
Coal of Africa (CoAL‚ CZA) has successfully raised $44.8 million via an equity placement.
The proceeds will be used to finance the continuing ramp-up at the Vele Colliery‚ pre-mining right capital expenditure at the Makhado Project (including technical drilling and analysis for final thermal coal and fines test work)‚ and additional drilling activities at Coal of Africa’s Generaal‚ Voorburg and Jutland tenements.
The placing price represents a discount of 1.96% to the closing middle market price of 25.5 pence per share on AIM on 3 August. The placement of 115.5 million new shares‚ when combined with the 685.5 million shares already in issue‚ will result in a total of 800.9 million shares in issue‚ which will represent 16.85% of the company’s existing issued share capital.
Of the 115.5 million total new shares‚ 80.6 million shares have been placed firm and will be issued by Coal of Africa further to the company’s capacity to allot ordinary shares for cash. A further 34.9 million shares will be placed with investors conditional on obtaining shareholder approval at a general meeting of the company to be convened on or around 11 September.
CoAl also announced the appointment of David Brown as Chairman with immediate effect.
Brown joins Coal of Africa following a tenure of almost 14 years at Impala Platinum where he served until recently as Chief Executive.
“Raising capital despite the current commodity pricing difficulties has been a significant achievement for the company. Coal of Africa’s shareholder base has continued to be highly supportive of the expeditious and responsible exploitation of the company's significant project pipeline‚” said Brown.
He added that the key focus will be to re-establish shareholder value and‚ to facilitate this‚ all strategic options would be assessed.
“The company is at the critical stage of moving beyond being a junior miner and I look forward to leading all stakeholders into its next crucial stage of development‚” he said.
CoAL expects to complete the definitive feasibility study on its Makhado project in the September quarter and is targeting Phase 1 run-of-mine (ROM) of 10 to 14Mtpa to produce around 2.2 to 2.5Mtpa of hard coking coal and 0.5 to 1Mtpa of export grade thermal coal for a period of at least 16 years.
The company continues to evaluate multiple funding options for the project.
The date for the formal exercise of Exxaro’s right to a 30% participation in the Makhado Project has been extended to 30 September to allow for the completion of additional studies. CoAL is considering a number of options to fund the project net of any potential Exarro investment and co-funding of the project development costs.
John Wallington‚ Coal of Africa CEO‚ welcomed the fund raising‚ adding that the company had received good support from both existing and new investors‚ despite trying market circumstances.
“Coal of Africa is a long-term player with a long-term vision. And step-by-step‚ we are making that vision a reality‚” said Wallington. - I-Net Bridge