Twenty million new shares will be released at 20 cents each with the IPO closing on February 11, before a February 22 listing.

 

The Brisbane-based company, backed by Cygnet Capital, will be lead by former QCT Resources managers’ Christopher Rawlings as chairman, and Keith Barker as chief executive.

 

NEC has emerged from the corporate shell of former listed technology company Poltech International, which went through an administration process last year. All liabilities of the company have now been extinguished and the former business sold, with the name changed to Northern Energy and new business strategy, board and management established.

 

Based on maximum subscription to its offer, NEC will hold a market capitalisation of $11 million.

 

NEC’s initial focus will centre on the brownfield exploration opportunity Ashton, which it has targeted as a hard coking coal resource development project.

 

Located 60km north of Inverell in northern New South Wales, Ashford was previously mined to supply a local power station. NEC chief executive Keith Barker said drilling at the mine had been completed pre-JORC so no resource statements could be released, however, quality analysis at the time suggested coal with good coking characteristics.

 

“Our immediate intention is to go back in and verify the old data so then can make a statement about resources immediately adjacent to the old mine,” Barker said.

 

NEC will carry out a $1 million bankable feasibility study over the next three years – on completion of which it will have the right to increase its interest by a further 25% for a further five million shares.

 

NEC also aims to carry out verification work on the Elimatta thermal coal project near Wandoan in Queensland’s Surat Basin. The project is located close to large coal resources held by Xstrata Coal at Wandoan.

 

Previous exploration by Brigalow Mines identified a 115Mt resource (pre-JORC) at Elimatta.

 

“We believe the delineation of a coking coal resource at Ashford would result in competitive strength due to the relative geographical scarcity of competitive coking coal resources globally. The thermal coal project in Queensland gives us a diversified portfolio with significant growth potential,” Barker said.

 

“We see significant opportunities for new independent entrants to the coal industry, particularly in light of current strong growth in the global coal market which will require the identification and development of new resources to service this growth and replace depleted resources,” he said.