Bathurst raises AU$7.93m in discounted placement to help fund Escarpment mine
Bathurst Resources [NZX: BRL] raised A$7.39 million in a discounted placement to institutional investors to help fund development of its Escarpment open-cut coal mine on the Denniston Plateau near Westport.
The Wellington-based mining company sold about 123 million shares at 6 Australian cents, or 6.5 New Zealand cents apiece. The stock dropped 7.3 percent to 7.6 cents after trading resumed on the NZX today, having been halted for the placement.
Managing director Hamish Bohannan said the company is mulling an offer of "a small entitlement issue" for its existing shareholders at a ratio not more than one for 10 and would make an announcement on that soon.
"The company has recently announced initiatives to preserve cash while we await our final authority to commence operations at Escarpment," he said. "The proceeds of this placement will be used for working capital for the initial development phase of the project so we can move quickly into full commercial production once international coal prices recover."
In February, the company said it would cut 29 jobs in response to the lowest world prices for coking coal in the past nine years. Bathurst won resource consents for Escarpment near Westport last October, more than two years after initial consents were appealed by environmental groups. In the meantime, prices slumped to the extent that there would be no margin in extracting coal from the new mine.