19/05/2008 - 08:37

Metex raises $22m for Qld site

19/05/2008 - 08:37

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West Perth based mineral exploration company Metex Resources has raised $22 million, with funds being used to complete its Underground Coal Gasification trial site in Queensland.

Metex raises $22m for Qld site

West Perth based mineral exploration company Metex Resources has raised $22 million, with funds being used to complete its Underground Coal Gasification trial site in Queensland.

The capital raising for the project now totals $36 million, with the company already sourcing $11 million through a placement from chemical company Incitec Pivot in early May.

The company issued 55 million shares, at a price of 40 cents per share, with the money raised also to be used to complete further drilling and the project's engineering and construction needs.

Full announcement below:

Metex Resources Limited, soon to be renamed Carbon Energy Limited, is completing construction of its Underground Coal Gasification (UCG) trial site in Queensland, today announcing it has finalised a $22 million capital raising through the placement of 55 million Metex shares at a price of $0.40 per share.

The Perth-based Company said today (Monday) that the placement was made to institutional, sophisticated and professional clients of Southern Cross Equities, and closed heavily oversubscribed. It brings the total capital raised by Metex over the past two weeks to $36 million, and follows the announcement on 5 May 2008 that Metex had secured leading chemical company, Incitec Pivot Ltd, as a strategic investor and potential Joint Venture partner through an $11 million share placement.

Managing Director of Metex Resources, Mr Ian Walker, said the Company has now secured all funding required to complete a $20M commercial scale oxygen-injected UCG trial at the Company's Bloodwood Creek Project in the Surat Basin, for the demonstration of commercial scale Syngas production.

"We are very pleased by the strong response to this capital raising, which reflects the significant excitement surrounding Underground Coal Gasification as a potential method to reduce the cost of introducing and supplying clean coal energy," Mr Walker said. "Metex has taken a leading role in the commercialisation of UCG, and successful completion of this trial at Bloodwood Creek will place the Company at the forefront of 'green' energy technology in Australia."

Funds raised through the combined $36 million capital raising will be used to complete all engineering and construction requirements for the UCG demonstration trial, as well as to pursue commercialisation options for the resultant Syngas, including preliminary feasibility studies.

Funds will also be used to conduct an additional drilling campaign to expand the current JORC code compliant coal resource of 100Mt at Bloodwood Creek, along with further evaluation of Metex's 2,400km2 coal leases in the Surat Basin.

In addition, part of the capital will be used by Metex to acquire the remaining 50% interest in CEPL from the CSIRO and to fund working capital and future project acquisitions.

The share placement will be completed in two tranches, with an initial 15 million shares to raise $6 million issued under Metex's 15% placement capacity. This Tranche is expected to be completed within a week. The issue of the remaining 40 million shares for $16 million is subject to shareholder approval, with a General Meeting of Shareholders expected to be held towards the end of June 2008.

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