19/08/2013 - 14:26

$1m funding coup for Ascot Resources

19/08/2013 - 14:26

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Drilling operations at the Titiribi coal project in Colombia.

Perth-based coal explorer Ascot Resources has secured $1 million in funding from engineering and minerals processing group Sedgman, which will emerge as Ascot’s largest shareholder.

Ascot said the finance package would comprise a $500,000 share placement, priced at 10 cents per share, and a $500,000, two-year unsecured loan note.

Once the transaction is completed, Sedgman will become Ascot’s major shareholder with a 13.8 per cent stake.

The notes will be issued on substantially the same terms as those issued to private equity investor Resource Capital Funds and Ascot chairman Paul Kopetjka, and include a conversion price of 18 cents per share and a coupon rate of 14 per cent.

The funds will be put towards continuing feasibility studies at Ascot’s Titiribi coal project in Columbia, and for expenses incurred in relation to completing the acquisition of a stake in the Uraba concession, as well as general working capital.

Ascot chairman Andrew Caruso said the investment by Sedgman marked the beginning of a strategic relationship between the two companies.

“Despite the recent weakness in the global resource sector and challenging market conditions currently faced by junior resource exploration and development companies, the company’s advancement in delivering its maiden JORC resource at Titiribi has added considerable value to the company’s shareholders,” Mr Caruso said.

“With capital availability in the mining sector being restricted, particularly at the junior end, Ascot’s success in securing another tranche of funding is a testament to the quality of the Titiribi coal project.”

Ascot shares last traded at 5 cents. 

 

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