West Perth-based Metex Resources Ltd has raised $6 million to fund development of its subsidiary, underground coal gasification technology developer Carbon Energy Pty Ltd, the company has announced.
The full text of a company announcement is pasted below
- Metex Resources Ltd has raised $6 million by placing 20 million shares.
Proceeds from this placement will be used to fund initial requirements to advance the Carbon Energy initiatives.
Metex Resources Ltd (ASX Code: MEE) has received advice from Sydney-based stockbroking group, Southern Cross Equities, that they have received verbal acceptances for the placement of 20 million Metex shares to institutional clients and high net worth investors at a price of $0.30 per share to raise $6 million in gross funds.
This initial raising will assist in kick starting the development of Metex's Carbon Energy Pty Ltd ("CEPL") initiatives including:
- Funding initial engineering and construction payments for the underground coal gasification ("UCG") demonstration trial at Bloodwood Creek.
- Funding of additional pre-development site characterization programs at Bloodwood Creek.
- Provide $2.5 million to CSIRO for the cash component of the acquisition of the remaining 50% of CEPL.
- Provide working capital.
- The placement has been completed using Metex's right to place up to 15% of its capital within a 12 month period without shareholder approval.
As previously advised in our release of 7 November 2007, Metex is in the process of becoming a significant energy company specializing in the development of UCG as a significant source of economic quantities of syngas suitable for power generation and coal to liquids opportunities following the acquisition of 100% of CEPL.
Subject to the receipt of shareholder approval for the transaction Metex will hold the 100% of CEPL as a wholly owned subsidiary, allowing the company to fast track the development of UCG demonstration at Bloodwood Creek in the Surat Basin, 55km west of Dalby in southeast Queensland.
Metex has raised these interim funds following the appointment of Thomas and Coffey of Brisbane as Project Managers for the development, and the satisfactory conclusion of all EPCM construction contracts. The development is budgeted to cost approximately $20 million and entails the construction of a 1PJ (petajoule) per annum syngas module. Construction is to commence, subject to all approvals being received, in January 2008. Further details of the objectives sought and the significant commercial outcomes that may be achieved from the demonstration are included in the Company's recent September 2007 Quarterly Report to the ASX of the 31Oct 07.
Metex is proceeding with the restructuring of its Board and management to position the Company as a significant UCG energy Company. This will require a shareholders meeting to approve the issue of shares to the vendors of CEPL, which will result in CSIRO becoming a significant shareholder in Metex, and various other matters including a change of name. It is anticipated a shareholders meeting will be called shortly to effect these changes.
The Directors are appreciative of the support of Southern Cross Equities, and the strong investor interest in the Company's emerging Clean Coal Energy Initiatives.
The Company advises that this is the announcement referred to in its request for a Trading Halt affected on 20 November 2007.