Paringa Resources will raise $8 million on the ASX to fund development of the Poplar Grove coal project in the United States.
The Perth-based company said it had received commitments for a placement of 19 million shares at $0.42 a share.
It plans to use the proceeds from the share placement to complete an updated bankable feasibility study for a coal seam prospect at Poplar Grove in early 2017 and to provide funding for the company to start development of the project mid next year.
Paringa managing director Todd Hannigan said the share placement reflected the quality of the project and the rapidly improving fundamentals of the US coal and energy sector.
“The funds will allow Paringa to accelerate some of the key items required for Poplar Grove, with a key objective to de-risk the development schedule for the project,” Hannigan said.
“Our plan is simple and remains on track – we will develop low capital and operating cost mines located near river transportation in the Illinois coal basin – starting with the low cost and high margin Poplar Grove mine in mid 2017.”
The placement share price represents a 7.7 per cent discount on the company’s 10-day volume weighted average price (VWAP), according to Paringa.