JOHANNESBURG (miningweekly.com) – Australia-listed Paringa Resources has successfully completed a bookbuild for a placement of 38.20-million shares at A$0.17 a share to raise A$6.49-million.
The proceeds of the placement will be used to complete the bankable feasibility study for the Buck Creek No 2 mine and provide funding to start the development of the mine by mid-2017.
The Buck Creek No 2 mine is located in the Western Kentucky region of the Illinois basis. A scoping study has established that Paringa will require capital expenditure of $44-million to build the 1.8-million-tonne-a-year operation.
The Buck Creek No 2 mine will be followed by the development of the 3.8-million-tonne-a-year Buck Creek No 1 mine, which will require a capital investment of $127-million.
These two mines will transform Paringa into a 5.6-million-tonne-a-year supplier of coal into the Eastern US power market, CEO David Gay commented on Friday.
“We believe Paringa offers excellent exposure to the improving fundamentals in the US coal market, as US thermal coal stockpiles continue to deplete due to rising natural gas prices, favourable weather patterns and severe production cuts from higher cost mines,” he added.
Curran & Co and Argonaut acted as lead managers to the placement, which Gay said received strong institutional support.