PERTH (miningweekly.com) – Coal hopeful Prairie Mining on Monday welcomed an A$83-million investment into its Lublin coal project, in Poland, by natural resources equity fund CD Capital.

The investment would be structured in three tranches, with the first comprising a private placement by Prairie subsidiary PDZ Holdings of noninterest bearing convertible loan notes worth some A$15-million, exchangeable for Prairie shares at a price of 33.5c each.

The second tranche would consist of the grant of unlisted options in Prairie, with an exercise price of 60c an option, to raise a further A$13-million, once executed.

The third tranche would consist of a priority right for CD Capital to invest a further A$55-million in any future funding conducted by Prairie.

CD Capital would have the right to appoint two nominees to the Prairie board for so long as the investment firm held a 15% interest in Prairie and one nominee should its shareholding drop to 5%.

Prairie CEO Ben Stoikovich noted that the completion of the transaction would fully fund all the required works, up to a positive mine development decision at the Lublin project, including the completion of a definitive feasibility study and all the required permitting.

“This investment is an exciting opportunity to expand and develop the Lublin coal project into a world-class resource. It is a high-quality project where we can achieve our investment mandate through a strategic partnership of our deep industry expertise with the experienced and committed Prairie management team.”

Prairie in September 2014 launched a prefeasibility study into the Lublin coal project, following the completion of a successful scoping study in April 2014, which revealed that the project could support production of up to 8.8-million tonnes a year of run-of-mine coal, to deliver 6.7-million tonnes a year of saleable coal, over a mine life of 22 years.

The CD Capital transaction was subject to a number of conditions, including shareholder approval.