West Perth-based explorer C @ Limited says it will launch a $28 million capital raising to acquire and explore eight highly-prospective Mongolian coal tenements from US giant Peabody Energy.
C @, which also announced a proposal to change its name to Draig Resources, said it had signed an agreement to acquire all of the shares in Peabody subsidiary BDBL, the entity that owns the tenements, for $US7.8 million.
The remainder of the funds would be applied to future exploration work, additional project evaluation and general working capital, the company said.
Renaissance Capital and BGF Equities will act as joint lead managers for the capital raising.
Managing director Mark Earley said the tenements were located in the Ovorhangay and South Gobi provinces, a region characterised by a number of recent black coal discoveries and its proximity to Chinese steel and energy markets.
“The execution of this agreement means we are able to position ourselves in a major emerging coal province,” Mr Earley said.
“We have already identified coking coal properties in Ovorhangay and will now push ahead to confirm a JORC compliant resource by early next year.
“Recent drilling showed the potential for C @ to produce, at a minimum, a soft coking coal with low ash content.
“Importantly, a number of licences are close to existing producing assets and infrastructure with close proximity to major energy markets like China and Russia make the economics of this project very favourable.”
Shares in C @ were placed in suspension following the announcement, and will resume trading by Friday.
Its stock last traded at 6.9 cents.
