Allegiance Coal (ASX:AHQ) raises $10M to fund New Elk
The Market Herald
- Allegiance Coal (AHQ) has successfully completed a placement after raising $10 million in total proceeds
- The placement enjoyed significant interest from European institutional investors, including new investor Deutsche Balaton
- Proceeds from the placement will fund development and production at Allegiance Coal’s New Elk Mine in Colorado
- The company is also conducting a share purchase plan, in which shares can be bought at the placement price
- Allegiance Coal is up 6.41 per cent and trading at 8.3 cents per share
Allegiance Coal (AHQ) has successfully completed a placement after raising $10 million in total proceeds.
Approximately 125 million shares in the coal company were issued to investors at 8 cents each. This latest placement was an extension of the company’s $15 million placement, which was completed last month.
Allegiance Coal’s placement enjoyed significant interest from European institutional investors, including new investor Deutsche Balaton.
With the $10 million in proceeds from the placement in hand, the company is now fully funded to develop and commence production at its New Elk Mine in Colorado. Allegiance Coal intends to begin production at New Elk in the June 2021 quarter.
While the company currently has a term sheet with Nebari Natural Resources Credit Fund 1 LP, Allegiance Coal plans to develop New Elk without the need for additional project debt.
Allegiance Coal’s Chairman and Managing Director, Mark Gray, commented on the company’s successful placement.
“We are delighted to have received such strong European institutional investor interest, and welcome our new investors, including Deutsche Balaton, to the register,” he said.
“Although we have advanced the US$15 million [roughly A$19.49 million] debt facility, the placement allows us to restart the New Elk Mine without the need for this additional leverage. The Board thanks Nebari for its involvement in the company and the New Elk project to date,” he added.
Mark also went on to remind Allegiance Coal’s existing shareholders of the opportunity to participate in the company’s share purchase plan. Eligible shareholders will be able to buy Allegiance Coal shares at 8 cents each, the same price offered in the placement.
The share purchase plan is capped at $2 million and is scheduled to close on March 17, 2021.
Allegiance Coal is up 6.41 per cent, trading at 8.3 cents per share at 2:05 pm AEDT.