PERTH (miningweekly.com) – ASX-listed Bowen Coking Coal has completed an A$11-million placement and secured A$15-million in debt from a private credit institution to fund the restart of its recently acquired Bluff mine, in Queensland.

Bowen in October this year struck a deal with fellow-listed mining contractor MACA to acquire the Bluff mine for A$5-million in either cash or Bowen shares.

MACA will also be released of a A$4.6-million environmental financial assurance bond, and will be paid A$2/t in royalty on coal sold above $120/t, capped at A$10-million, and A$5/t in royalties for coal sales exceeding $150/t, uncapped. For coal sales ranging above $200/t, MACA will receive A$5/t in royalties, uncapped.

Bowen had previously told shareholders that the restart capital for the Bluff project had been estimated at between A$5-million and A$7-million, with A$6-million to A$9-million estimated in total for the first 12 months.

The company on Thursday announced that the equity raising was managed by Petra Capital, which acted as sole lead manager and sole bookrunner, with 68.75-million shares placed at a price of 16c each, under the company’s existing placement capacity.

The new A$15-million debt facility was also secured, and structured as a term loan with a bullet repayment at maturity. The facility has an initial term of 12 months, a coupon rate of 9% and customary fees.

Bowen MD Gerhard Redelinghuys told shareholders that the acquisition and funding of the Bluff project were key milestones in Bowen’s journey to becoming Australia’s next metallurgical coal producer.

“We look forward to recommissioning and operating the mine in a safe and responsible way to deliver high quality ultra low volatility pulverised coal injection (PCI) coal to our customers in the steel industry.

“Furthermore, we are delighted with the strong reception we received from the market for our inaugural debt facility and capital raising, which positions Bowen well as it transitions from coal explorer to multi-mine coking coal producer.”

The Bluff mine assets include a granted mining lease and approved Environmental Authority to mine up to 1.8-million tonnes a year of high-quality ultra-low volatile PCI coal. Coal production commenced in the first quarter of 2019 and 1.4-million tonnes were mined by midway through the fourth quarter of 2020, at which time the project was placed on care and maintenance.

Bluff has total indicated and inferred resources of 13.5-million tonnes.