PERTH (miningweekly.com) – ASX-listed Gateway Mining has secured a funding package of up to A$10-million from cornerstone investor Baker Steel Resources Investment Trust to finance its acquisition of Queensland Coal Investment Holdings (QCIH).
In March, Gateway announced its plan to acquire QCIH, which owns two coal projects in the Bowen basin with a combined resource of 2.6-billion tonnes, for A$10-million in cash and a further A$50.5-million in shares.
Under the terms of the agreement, Gateway is expected to raise a minimum of A25-million through a share placement priced at 1.2c each.
Gateway said on Friday that the company had entered into a convertible note and share subscription agreement with Baker Steel Resources Trust for a funding package of between A$8-million and A$10-million.
Baker Steel will subscribe for convertible notes worth A$6.4-million and will also participate in Gateway’s proposed equity capital raising by subscribing for 133.3-million new shares, to raise A$1.6-million.
Within 90 days of Gateway’s extraordinary general meeting to approve the acquisition of QCIH, Baker Steel could elect to subscribe for an additional 32 convertible notes, at an issue price of A$50 000 a note, at a subscription amount of A$1.6-million, and an additional 33.3-million new shares at an issue price of 1.2c each, to the value of A$400 000.
The agreement with Baker Steel remains subject to a number of conditions, including completion of the acquisition and regulatory and shareholder approvals, as well as Gateway raising no less than A$15-million under a public share offer.