Paringa raises $53m to build coal mine

After locking in a $US20 million ($A26 million) debt facility agreement last week, aspiring coal miner Paringa Resources has tapped investors for $53 million to fund development of its Poplar Grove mine in Kentucky.

Paringa, which is chaired by Perth businessman Ian Middlemas, raised the funds through the placement of 102 million shares at 52 cents each, representing a 7 per cent discount to the company’s 30-day volume-weighted average price.

In a statement, Paringa managing director Todd Hannigan said the funds, combined with the $US20 million debt facility with Macquarie Bank and existing cash reserves, would fully fund Paringa through development of the Poplar Grove coal mine.

According to an expanded bankable feasibility study on the mine released last month, Paringa plans to spend about $US44.7 million ($A59.5 million) to bring Poplar Grove into production, with the mine expected to operate over 25 years.

“This successful capital raising completes the funding required for the development of Poplar Grove starting July 2017,” Mr Hannigan said.

“We now have a strong financial position to deliver on our plan to become a 6.6 million tonnes per annum Illinois Basin producer – starting with construction of the low cost and high margin Poplar Grove mine and then followed by the fully permitted, high-margin Cypress Mine.”

Argonaut acted as lead manager to the placement, with Hartleys and Curran & Co acting as co-managers.

Paringa shares were 9.6 per cent lower to 56 cents each at 10:15am.