Completion of $8 Million Placement
Perth, Oct 28, 2014 AEST (ABN Newswire) - Atrum Coal NL (
ASX:ATU) (ATRCF:OTCMKTS) ("Atrum" or the "Company") is pleased to announce that it has completed a placement to institutional and existing sophisticated investors to supplement existing facilities.
Executive Chairman, Mr James Chisholm commented on the appointment:
"2014 has been a solid year of exploration and development at Groundhog. We have a robust SPFS for Groundhog North in hand and look forward to capitalising on the strong interest shown by prospective consumers in our high grade and ultra-high grade anthracite. Given we have completed the bulk of our site works for the time being, Atrum is now well funded to finalise a finance package for Groundhog North."
PLACEMENT
The Company has completed a placement of $8 million to existing sophisticated and institutional investors through the issue of ordinary shares at a price $1.20 per share which represents only 3.8% of the fully diluted capital structure of the Company. The funds raised will supplement the Company's existing facilities and allow the Company to complete a sell-down process to fund Groundhog North in a timely manner. The placement will occur under the Company's existing placement capacity.
The existing facilities and new funds will allow the company to progress the various regulatory permits required to develop an underground anthracite mine, and allow the Company to oversee a multi-track process to secure the funds required for development of GHN on a staged basis, with funds drawn down as permitting milestones are achieved.
Over the coming months, the Company will focus on progressing permitting, running the multi-track funding process for GHN, completing a concept study for an additional mine, geological modelling and a resource upgrade. Given that the bulk of the site exploration activities have been completed, operating costs have dropped to less than $2 million per quarter.
The GHN multi-track funding process has been designed to maintain competitive tension between high grade anthracite end-users, global private equity groups and government-owned enterprises that have shown strong interest in participating in the development of the proposed mine. A global investment bank will be appointed in due course to assist the Company with this process.
GHN, the first mine on the 800sqkm Groundhog Anthracite tenure demonstrates a A$1.7 billion posttax NPV10 and 42% post-tax IRR, as shown in the recently released Supplementary PFS (SPFS).
Given the size of the resource and the market demand for anthracite products, the Company has begun work on a concept study for another
About Atrum Coal Limited
Atrum Coal Limited (ASX:ATU) is a metallurgical coal developer. The Company flagship asset is the 100%-owned Elan Hard Coking Coal Project in southern Alberta, Canada. Elan hosts large-scale, shallow, thick, hard coking coal (HCC) deposits with a current JORC Resource Estimate of 298 Mt (70 Mt Indicated and 228 Mt Inferred). Comprehensive quality testing of Elan South coal on samples from the 2018 exploration program, combined with review of substantial historical testwork data for the broader Elan Project, has confirmed Tier 1 HCC quality.
The initial focus for development is the Elan South area, which is located approximately 13 km from an existing rail line with significant excess capacity, providing direct rail access to export terminals in Vancouver and Prince Rupert. Elan South shares its southern boundary with Riversdale Resources Grassy Mountain Project, which is in the final permitting stage for a 4.5 Mtpa open-cut HCC operation. Around 30km to the west, Teck Resources operates five mines (the Elk Valley complex) producing approximately 25 Mtpa of premium HCC for the seaborne market.
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