20/03/2014 - 11:14

Atrum plans coal spin-out

20/03/2014 - 11:14

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Perth-based Atrum Coal has announced it will spin-out its coal exploration assets, with plans to launch an initial public offering for a new company on the ASX later this year.

Atrum plans coal spin-out

Perth-based Atrum Coal has announced it will spin-out its coal exploration assets, with plans to launch an initial public offering for a new company on the ASX later this year.

Kuro Coal's assets will include Atrum's Peace River and Bowron River coal projects and Naskeena anthracite project, all located in Canada.

Atrum expects Kuro Coal to raise between $6 million and $8 million via a public offer prospectus at an issue price of 20 cents per share in the second quarter of this year.

Atrum shareholders will receive one free Kuro Coal share for every four Atrum shares held.

"The spin-out of Kuro Coal allows us to capture a great deal of potential value and provides an opportunity for Atrum shareholders to freely participate in the development of what we hope will be another world class coal explorer," Atrum chairman James Chisholm said.

Mr Chisholm said Kuro Coal would seek out new acquisition opportunities while developing its existing assets.

The demerger comes as Atrum moves closer to production at its flagship Groundhog anthracite project, which Atrum will retain.

Atrum expects to complete a pre-feasibility study at Groundhog in the coming months, with plans to commence initial mining next year before moving to full production in 2016.

The company's shares were trading 1 cent lower at $1.84 at 11:10am WST.

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