The $6.49 million proceeds from the 38.2 million share placement at A17c apiece will be used to complete the bankable feasibility study for the Buck Creek No.2 mine and also fund the company to start development of the No.2 mine by mid-2017.
Curran & Co and Argonaut acted as lead managers to the placement.
The issue 17c a share issue price represents a 5.9% discount to the 30-day volume-weighted average price on the Australian Securities Exchange. Paringa’s shares were priced at 20c in intraday trade.
Paringa president and CEO David Gay said the strong institutional support received underlined the quality of the Buck Creek mine Complex.
He believes that complex is “one of the best undeveloped coal projects in the US, being surrounded by mines which continue to achieve high earnings before interest, tax, depreciation and amortisation margins.
“The emergence of the low capex Buck Creek No.2 Mine has transformed the economics of the Buck Creek Mine Complex.
“Paringa’s multi-stage development of the Buck Creek No.2 Mine, followed by the No.1 Mine will ultimately allow the company to become a strategic 5.6 million tonnes per annum supplier of high quality coal into the eastern US power market.
“We further believe Paringa offers excellent exposure to the improving fundamentals in the US coal market as US thermal coal stockpiles continue to deplete due to rising natural gas prices, favourable weather patterns and severe production cuts from higher cost mines.”
