Guildford Coal to Raise Around $26.5 Million
Guildford Coal is taking advantage of the feelgood factor in the resources sector by seeking to raise around 25 million Australian dollars (US$26.5 million) through an issue of new equity, a person familiar with the matter told Deal Journal Australia.
The Newcastle-based company, which earlier this year secured a mining license for its flagship South Gobi project in Mongolia and is also advancing coal projects in Queensland state, plans to issue new shares at A$0.70 each. That represents a slight discount to its closing price of A$0.71/share Friday.
Guildford Coal, which has a market value of A$170 million, placed its stock in a trading halt early Monday due to its capital raising plans. It has appointed Sydney-based Foster Stockbroking to lead the issue.
Mining companies with coal projects in Mongolia are attracting interest because of their ability to supply neighboring China, which overtook Japan as the world’s largest importer of coal by volume last year. Successful buyouts of ASX-listed Hunnu Coal and QGX’s coking coal assets last year underscored the region’s potential, especially if projects are located close to rail spurs.
In Mongolia, Guildford Coal owns 70% of Terra Energy, which is expected to produce its first coal from the South Gobi project in the first half of this year. In late January, the company said the South Gobi resource now totals 70.4 million tons of coking coal–chiefly used in steelmaking–up from an earlier estimate of 63.1 million tons.
Terra Energy’s resource is located around 30 miles east of two operating mines, including one owned by Hong Kong-listed SouthGobi Resources, producing a combined 5 million tons of coal annually that is sold to customers in northern China’s Gansu and Shanxi provinces and Inner Mongolia region.
Guildford Coal says a mine with an annual production capacity 1 million-2 million tons of coal could be built at the South Gobi development site.
In addition to the South Gobi project, the company owns the nearby Middle Gobi project in Mongolia, and the Hughenden and White Mountain thermal coal projects in Queensland’s Galilee Basin.
Like us on Facebook or follow us on Twitter @WSJAustralia
The Newcastle-based company, which earlier this year secured a mining license for its flagship South Gobi project in Mongolia and is also advancing coal projects in Queensland state, plans to issue new shares at A$0.70 each. That represents a slight discount to its closing price of A$0.71/share Friday.
Guildford Coal, which has a market value of A$170 million, placed its stock in a trading halt early Monday due to its capital raising plans. It has appointed Sydney-based Foster Stockbroking to lead the issue.
Mining companies with coal projects in Mongolia are attracting interest because of their ability to supply neighboring China, which overtook Japan as the world’s largest importer of coal by volume last year. Successful buyouts of ASX-listed Hunnu Coal and QGX’s coking coal assets last year underscored the region’s potential, especially if projects are located close to rail spurs.
In Mongolia, Guildford Coal owns 70% of Terra Energy, which is expected to produce its first coal from the South Gobi project in the first half of this year. In late January, the company said the South Gobi resource now totals 70.4 million tons of coking coal–chiefly used in steelmaking–up from an earlier estimate of 63.1 million tons.
Terra Energy’s resource is located around 30 miles east of two operating mines, including one owned by Hong Kong-listed SouthGobi Resources, producing a combined 5 million tons of coal annually that is sold to customers in northern China’s Gansu and Shanxi provinces and Inner Mongolia region.
Guildford Coal says a mine with an annual production capacity 1 million-2 million tons of coal could be built at the South Gobi development site.
In addition to the South Gobi project, the company owns the nearby Middle Gobi project in Mongolia, and the Hughenden and White Mountain thermal coal projects in Queensland’s Galilee Basin.
Like us on Facebook or follow us on Twitter @WSJAustralia
Comments
Post a Comment