Bowen Coking Coal has successfully completed a $40 million placement at $0.17 per share to investors, and a fully underwritten $10 million share purchase plan to eligible shareholders at the same price as the placement.
The company said that the capital raised will allow for its growth trajectory to continue, despite third party logistical delays affecting development of its Ellensfield South pit, which has impacted near term cash flows. The first coal from Ellensfield South is expected in September.
Bowen Coking Coal said at a steady pace, this will increase its coking coal export volumes at the Burton Complex, with this pit providing additional low cost, high yielding coking product.
“Funds raised from the $40 million placement will primarily be applied to the Burton capital expenditure, including completing the Ellensfield South box cut, haul road upgrade, infrastructure and working capital,” the company said.
Capital expenditure for other significant items is being funded from operating cash flow and existing financing arrangements, which includes the relocation of the power line at Broadmeadow East (BME) to provide access to additional coal in the resource and extend the mine life of the pit to at least 2027.
The reconnection of permanent electricity at Burton and completion of the refurbishment of Module 2 of the Burton coal handling and preparation plant (CHPP) is currently underway and a substantial run of mine and product stocks have been built at BME and Burton in the lead up to completing the CHPP Module 1 refurbishment.
“With the first stage of the CHPP now successfully operating 24 hours a day at or above its nameplate capacity of 2.75 megatons per annum, these stocks will be converted into cashflow over the coming period,” the company said.