Austral managing director Ugo Cario said the company was pleased by the response from institutional investors, with strong demand for the scrip.
"The proceeds of the raising will be used to fund the upgrade of mine infrastructure as part of the Tahmoor North expansion which is scheduled to double the productive capacity of the Tahmoor mine by 2004," Cario said.
The Tahmoor North project is in essence buying a new longwall at a cost of $60 million and upgrading all of the surface facilities to accommodate the increased production, company secretary Stephen Peterson told MiningNews.net earlier.
The funding announcement comes less than a week after the company said it expected profit to triple in 2002, and is well timed to take advantage of the company's strong share price run.
The placement consists of two tranches. The first tranche of 12.4 million shares raising $5.58 million will be completed this week.
The second of 37.6 million shares to raise $16.92 million has been committed subject to shareholder approval at a general meeting to be held in mid-April.
In addition to the $22.5 million placement, Austral proposes to establish a share purchase plan whereby existing shareholders can elect to subscribe up to $3000 for Austral shares at a discount to the market price. Any shares issued under the plan would rank equally with existing ordinary shares on issue.
"Through this plan, Austral Coal's small shareholders would have an opportunity to acquire additional shares at a discount, without incurring brokerage or other transaction costs," Cario said.
