Coal company raising cash

COAL producer TerraCom has announced a fully underwritten A$15 million raising.
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The Blair Athol mine.



The issue price for the three-for-13 non-renounceable pro-rata issue is 21.5c per share, in line with last Thursday’s closing price.

The offer is underwritten by Gleneagle Securities and sub-underwritten by Bonython Coal No 1, a company backed by Australian businessman John Singleton.

Bonython Coal executive chairman Paul Anderson said it had been watching stocks for a number of years but was pleased to be entering the coal industry through a partnership with TerraCom.

The proceeds of the issue will be used to deliver production of 3.5 million tonnes this year, expedite the Blair Athol rail line construction, and partially repay debt.

The company achieved nameplate run-rate in December, and hopes to deliver 1.5Mt from the BNU coking coal mine in Mongolia, and 2Mt from Blair Athol.

Construction of the Blair Athol load-out facility is underway with commissioning expected this quarter.

TerraCom believes the load-out facility will deliver an additional $20 per tonne on margin and net profit before tax of $34 million per annum.