AltX- and TSX-V-listed South African coal miner Buffalo Coal Corporation will offer rights to South African and Canadian holders of its common shares, on a one-for-one basis, at the close of business on November 18.
The company, which has 421.35-million common shares in issue, intends to use the proceeds to settle debt owed to Investec Bank, as well as for general working capital purposes and rights offer costs.
If the company completes 100% of the rights offering, it will have sufficient working capital to meet its ongoing obligations over the next 12 months.
Buffalo Coal’s majority shareholder Belvedere Resources, has agreed, subject to certain terms and conditions, at the subscription price and on the closing date, to acquire all of the common shares that are not otherwise subscribed for and bought under the rights offering.
A single right entitles the holder thereof to subscribe for one common share upon payment of the subscription price of C$0.01, or 13c, apiece.
The rights offering will close at 12:00 in South Africa and 12:00 Toronto time, on December 22, after which time unexercised rights will be void and of no value.
Buffalo Coal holds a majority interest in two operating mines through its 100% interest in Buffalo Coal Dundee – a South African company which has a 70% interest in Zinoju Coal. In turn, Zinoju Coal holds a 100% interest in the Magdalena bituminous mine, the Aviemore East anthracite mine and the Balgray and North Adit anthracite projects in South Africa.