The coal junior signed a share purchase agreement for the sale and purchase of Menzhinsky in April, resulting in an indirect acquisition of a 100% controlling interest in the mine.

The private placement arrangement with two independent Canadian securities firms will include the offering of up to 48.6 million EastCoal shares at a price of 35c.

The miner reported the Menzhinsky coal mine would yield 641,250 tonnes of coal and generate a net cash flow of $US38 million in its first five years.

It said an upcoming report would confirm the operation’s net present value at $316 million.

JORC-compliant coal resources for Menzhinsky stand at 40.7 million tonnes.

EastCoal chairman John Byrne said a proposed expansion of the coking coal mine might divert equipment that was originally intended for the company’s flagship Verticalnaya anthracite project, also situated in Ukraine’s easterly Lugansk region.

EastCoal focuses on the Donbass coal basin of Ukraine which has been known for its large coal reserves since the 1700s.