Continental Coal has completed an $8 million financing arrangement with South African mining company Village Main Reef.
Continental and Village announced the agreement in March, with Village set to take up 100 million Continental shares at 8 cents each, and establish and fund a mechanism for the sale of parcels of shares valued at less than $500.
Village will also acquire Continental shares on a discretionary basis, at a price of 10 cents per share, to take its stake in the Perth-based company up to 19.9 per cent.
Continental said today that the cash from the placement had been received and applications had been made to list the new shares on the ASX and AIM markets.
The funds will be used to retire debts, boost working capital and to strengthen Continental’s balance sheet.
“As a result of this transaction, Continental has significantly enhanced its balance sheet, streamlined its capital structure and strengthened the company’s growth strategy and operating credentials in South Africa, with a major, well-credentialed partner,” Continental chief executive Don Turvey said.
“AS a result of the completion and financial settlement of this transaction, VMR have the right ot appoint a representative to the Continental board, which it will do in the coming weeks.
At 1:20PM, WST, Continental’s stock was up 4.4 per cent, at 4.7 cents.
