It issued 166.6 million shares at 3c per share to VETL, a company associated with chairman Gary Cochrane, in partial conversion of a debt owed by Bounty to VETL.

“Bounty’s debt and gearing levels are now significantly reduced,” the company said.

The company suffered a setback when the Aquila mine, belonging to its only customer, Anglo American, was placed on care and maintenance last year.

Since Bounty has completed the transaction and issued the shares to VETL, it is ready to apply for official re-quotation of its shares.

Bounty also obtained shareholder approval on Friday to issue up to 150 million shares to raise $4.5 million to fund the phase 2 works of the Wongai coal project and provide for its working capital.

The company said it also had the capacity to raise capital through the issue of shares under Listing Rules 7.1 and 7.1A.

“These represent important milestones in Bounty’s restructuring,” it said.

The 2014 financial year started in a positive direction for Bounty with a joint venture, farm-in and life of mine management agreements for the Wongai coal project signed on September 13, Cochrane told the company’s annual general meeting earlier this year.

“These agreements allow Bounty to farm into 40% of the Wongai Joint Venture with development of the project to full bankable feasibility stage and then give Bounty the right to acquire a further 11% interest in the project at a discounted price of 25% of an independent valuation,” he said.

“The Wongai project is located in Cape York just north of the town of Laura.

“It has high quality hard coking coal resource with seam thickness ranging from 1.4 metres to 2 metres and is therefore suited to Bounty’s expertise and mining fleet capability.

“As part of the first phase of the farm-in agreement Bounty has now already completed an initial drilling program with successful completion of four cored holes.

“All holes encountered good quality coking coal at less than 115 metres depth with two of the holes having a coal thickness of 1.75 metres.

“This is thicker than the typical seam thickness at the Aquila seam that Bounty had been mining previously.

“There is also the potential for a low cost shallow underground entry with minimum portal and stone development.”