PERTH (miningweekly.com) - ASX-listed Argonaut Resources has agreed to sell down some A$4-million of its shareholding in coal developer Cuesta Coal as part of that company’s initial public offering (IPO).

Argonaut has invested some A$4.85-milion in Cuesta Coal over the past 14 months, and based on the proposed IPO price of 30c a share, the total value of this investment would be around A$9-million.

Argonaut said on Tuesday that at the completion of the proposed IPO, the company would continue to hold more than 16.7-million shares in Cuesta, with an implied value of around A$5-million.

“We are very pleased with the progress made by Cuesta Coal since our initial investment 14 months ago and our ongoing commitment to Cuesta Coal is evident in our decision to sell less than 50% of our current shareholding,” said Argonaut chairperson Patrick Elliott.

“Our decision to sell down is driven purely by our desire to ensure our extensive exploration programmes at Ban Bak, in Laos, and in Zambia remain fully funded. We also expect to be contributing during the year to the ongoing litigation costs at Lake Torrens, as Straits Resources reach their A$7-million earn-in expenditure.”

Cuesta Coal was formed in September 2011 to acquire all of the securities on issue in Blackwood Coal, and to prepare for the IPO. The prospectus for the IPO would be lodged with the Australian Securities and Investment Commission and the ASX within the next two weeks.

Elliott noted that Argonaut remained confident of the future success of Cuesta Coal and was supportive of the company’s ongoing develoment programme.

Cuesta holds a portfolio of tenement packages in the Bowen, Surat, Clarence-Moreton, and Galilee coal basins, with nine exploration licences granted. Over the next 12 to 18 months, the company would define a Joint Ore Reserves Committee-compliant resource and would identify one or two key projects for medium-term development.
 

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