- Allegiance Coal (AHQ) is set to raise $1.98 million after accepting firm commitments for a private share placement
- If fully approved by shareholders, more than 33 million shares will be issued at a price of six cents each
- Capital from the placement will be used to advance activities relating to the acquisition of the New Elk coking coal project in the U.S.
- In addition, the placement will fund the continued environmental assessment and permitting process at the Tenas Metallurgical Coal Project in Canada
- Shares in Allegiance Coal are down 9.46 per cent to 6.7 cents each
Allegiance Coal (AHQ) is set to raise $1.98 million after accepting firm commitments for a private placement.
If fully approved by shareholders, more than 33 million shares will be issued at a price of six cents each to sophisticated and professional investors.
What will the funds be used for?
Capital from the placement will be used to support acquisition activities for the New Elk coking coal project, located in Colorado in the United States.
In addition, the funds may also support the continued environmental assessment and permitting process at the Tenas Metallurgical Coal Project in Canada, pending a payment from Itochu Corporation.
Placement details
Funds for the $1.98 million placement are due on April 15, 2020 and shares will be allotted the following day.
The issue price of six cents per share represents an 11.6 per cent discount to the ten-day volume-weighted average market price of 6.8 cents.
Earlier in the week, M Resources and Allegiance Coal finalised an exclusive sales and marketing agreement for coal produced at the New Elk mine. The Latimore Family Trust, associated with M Resources Managing Director Matthew Latimore, has subscribed for a quarter of the placement.
Allegiance Coal directors Mark Gray and Johnathan Reynolds have also subscribed to the placement, however, this is still subject to shareholder approval.
Shares in Allegiance Coal are down 9.46 per cent to 6.7 cents each at market close.