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- Allegiance Coal (AHQ) has successfully completed a share placement and raised $7.5 million
- More than 150 million shares will now be issued to sophisticated and professional investors on November 20
- Subject to shareholder approval, Directors Mark Gray and Jonathan Reynolds have respectively subscribed for 2 million and 200,000 shares
- Allegiance Coal will use the money for its New Elk Mine in Colorado, and to complete the Environmental Assessment Application for the Tenas Project in British Columbia
- Following the completion of the placement, AHQ is well-placed to finalise the steps needed to secure US$25 million (around A$34.5 million) in debt funding
- Allegiance Coal has ended the day 11.1 per cent in the green with shares trading for 6 cents each
Allegiance Coal (AHQ) has successfully completed a share placement and raised $7.5 million.
The company entered a trading halt on November 11 but did not disclose how much it would be raising or what it will use the funds for.
More than 150 million shares will now be issued to sophisticated and professional investors on November 20.
Shares were priced at 5 cents, representing a 7.4 per cent discount to Allegiance’s last closing price of 5.4 cents, and a 14.9 per cent discount to the five-day volume-weighted average price.
Subject to shareholder approval, Directors Mark Gray and Jonathan Reynolds have respectively subscribed for 2 million and 200,000 shares.
Allegiance Coal will use the money as working capital at the New Elk Mine in Colorado, U.S., and to complete the Environmental Assessment Application for the Tenas Project in British Columbia.
“The capital raising represents an important step in the development of New Elk, as we target first production in mid-2021, alongside progressing our Tenas asset in conjunction with joint venture partner Itochu,” Chairman and Managing Director Mark Gray commented.
“The company is advancing discussions with several mine owners in relation to blending New Elk low sulphur coal with high sulphur Alabama high Vol A hard coking coal. Blending appears to offer an opportunity with potential earnings upside once New Elk is returned to production,” he added.
Following the completion of the placement, AHQ is well-placed to finalise the steps needed to secure US$25 million (around A$34.5 million) in debt funding that is currently under term sheet.
Allegiance Coal has ended the day 11.1 per cent in the green with shares trading for 6 cents each in a $37.52 million market cap.
