PERTH (miningweekly.com) – Coal developer Atrum Coal plans to raise some A$5-million to enhance the value of its Groundhog project, in British Columbia.
The company on Monday said it would undertake a one-for-17 nonrenounceable, pro rata entitlement offer, priced at 50c each to raise the cash. The offer would include one free option for every two shares subscribed for, with each option exercisable at 80c apiece.
If the entitlement offer was oversubscribed, or Atrum received interest from third-party investors, the company could raise up to an additional A$1-million by way of the issue of new shares, which would also be priced at 50c each, and would include one new option free of charge, for every two shares.
Atrum pointed out that the issue price represented a 58% discount to the company’s closing price on June 3.
The proceeds from the raising would be used to fund bulk sample collection at the Groundhog project, for potential offtake customers, as well as to complete and upgrade the high-wall scoping study to a prefeasibility study level, accelerate business development activities with potential offtakers and to cover general corporate costs.
The Groundhog North project, which covered less than 5% of Atrum’s broader Groundhog anthracite project, and which was estimated to host some 1.57-billion tonnes of resource, was expected to deliver about 5.4-million tonnes of coal a year.