Riversdale Mining Ltd has announced that it is set to raise AU$ 337 million (US$ 297 million) to accelerate development of stages 2 and 3 of the Benga coal project, in Mozambique.
The capital raising includes a AU$102 million fully-underwritten institutional placement, as well as a one-for-eight accelerated non-renounceable pro-rata entitlement offer.
The company said that the funds will be used as the equity component to speed up development of the coking and thermal coal Benga project, as well as fund scope upgrades to Benga stage 1, accelerated logistics development for the Benga coal project, working capital for Benga stage 1, and exploration of Riversdale’s other tenements in Mozambique.
Michael O’Keeffe, Riversdale’s executive chairman, said: “Securing funds through the raising to fast track Benga’s development is intended to maximise Riversdale’s ability to acquire infrastructure capacity as the Benga Coal Mine is developed. The raising is also expected to enhance Riversdale’s free float and liquidity, and the staged funding of Benga’s development through equity and alternative sources allows for an efficient utilisation of Riversdale’s balance sheet.”
Riversdale also confirmed that its three largest shareholders, Tata Steel, CSN Europe and Passport Capital, intend to take up their pro-rata entitlement in the Placement and Institutional Entitlement Offer.
The project has a production target of 20 million tpa ROM by 2013, comprising 6 million tpa premium hard coking coal and 4 million tpa of export quality thermal coal products.
O’Keeffe said that the development of the Benga coal project will enable Riversdale to exploit global demand and the strong outlook for hard coking coal, especially in the international markets: “Given the scale of the Benga Coal Mine and the quality of its coking coal products, we expect to have an impact on premium hard coking coal markets and buyers in India, Japan, China, Korea, Brazil and Europe. Steel mills in the markets that have sampled our coal will be pleased to hear that we are fast-tracking Benga to bring more premium hard coking coal to market ahead of original target dates.”
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