As takeover speculation grows, Bandanna said there was strong demand from existing and new institutional investors.

Institutional investors were offered the chance to buy new Bandanna shares at $1 each with five new shares offered for every 16 they held.

South Korean energy company SAMTAN maintained its 10% stake of Bandanna by taking up its full entitlement.

“The proceeds from the capital raising will be used to assist with developing key projects including securing Stage 1 capacity at Wiggins Island Coal Export Terminal and associated rail allocation,” Bandanna managing director Ray Shaw said.

The $33 million retail component of the entitlement offer is the same as the deal offered to institutional investors.

Opening today, the retail offer will close on September 9.

New shares from the institutional offer are expected to start trading on August 29, while new shares from the retail offer are expected to trade on September 20.

Bandanna projects

Bandanna’s Springsure Creek thermal coal project is targeting two longwall operations for 11 million tonnes per annum.

The Arcadia project is adjacent to Xstrata’s 8Mtpa Rolleston open cut mine, with the explorer noting there is potential for dual longwall development of its thermal seams which could also have some semi-soft coking coal quality

The Arcturus thermal coal project is targeting 5Mpta of product coal through open cut and underground mining in the later years, with first coal possibly in 2014.

The Dingo West open cut project will be the first cab off the rank for the company, with coal production slated for late 2012, pending government approvals, and is targeting 1Mtpa of metallurgical coal.

The company is also in a joint venture with privately-owned AMCI for the South Galilee project in the unexploited Galilee Basin, which is expected to produce around 13.6Mtpa of thermal coal over a 33-year mine life.

Bandanna shares are down 11.3% to $1.055 this morning.