In addition, Beijing Guoli has committed a further $6.5 million, with settlement three months after finalisation of the Stage 1 placement.

The purpose of this additional funding will be to facilitate a final investment decision and secure project finance for the development of Moorlands, Cuesta Coal managing director Matthew Crawford said.

“The funding agreement announced today with Beijing Guoli significantly strengthens Cuesta’s balance sheet and allows Cuesta to continue to work towards achieving its development objectives at Moorlands, in particular the operational focus on advancing the Definitive Feasibility Study,” he said.

“This is particularly pleasing given the challenging market conditions currently faced by emerging coal companies and the limited availability of funding.

Beijing Guoli recognises the potential of the Moorlands project, Crawford said.

“This funding is a further demonstration of the support of our major shareholder and a vote of confidence in Cuesta’s team.

Following the completion of both tranches of the placement, Beijing Guoli’s total investment in Cuesta will be $47 million,” he said.

“In addition, the continued support of Beijing Guoli will increase the likelihood of securing favorable project finance funding for the construction phase of Moorlands.”

The issue price for the placement is 10.3c per share, which represents a 15% premium to the last traded price.