Montem Resources raises $5.2m to progress Tent Mountain and Chinook coal projects
Aspiring Canadian coal producer, Montem Resources (ASX: MR1) has topped up its coffers with a $5.2 million placement to progress mine permitting at Tent Mountain and Chinook feasibility studies.
Montem chief executive officer and managing director Peter Doyle said the company was “delighted” with the support it had received in the placement, which resulted in “a number of highly credentialed institutional investors to the register”.
“The placement affirms our belief in the potential of our projects and provides a clear signal that the investment community understands the opportunity and differentiation Montem presents in the region,” Mr Doyle added.
Acting as sole lead managing and bookrunner to the placement was Petra Capital, with investors offered almost 30.4 million shares at $0.17 each, which was a 15% discount to the company’s closing price of $0.20 prior to the announcement.
Placement proceeds will be used to advance the feasibility work underway at Chinook, as well as completing permitting required to restart the Tent Mountain mine.
Both projects are hard coking coal (steelmaking coal) and located within Alberta under the more lenient Category 4 of the region’s 1976 Coal Development Policy.
Montem is targeting mid-year to submit its mining licence application and permit amendments for Tent Mountain, with planned preliminary production to begin in 2022.
Prior to its closure in 1983 due to poor market conditions, Tent Mountain produced a high quality coking coal which was exported to Japan.
An advantage for Tent Mountain is access to nearby requisite infrastructure including rail, port, power and water.
Prior to its ASX listing in September last year, Montem had completed a definitive feasibility study for Tent Mountain which assumes 1.1 million tonnes per annum over 14 years of hard coking sales from an existing open pit mine.
Underpinning the operation is a resource of 60.1Mt. The definitive feasibility study gave the mine a base case post-tax net present value of $136.9 million and a 17.3% post-tax internal rate of return.