Since January, Anglo Coal has decided not to extend Bounty’s two coal contracts in Queensland due to the downturn in the metallurgical coal market.
Bounty has subsequently begun a contract, as well as additional work, at Peabody’s Chain Valley mine and has redeployed the majority of its workforce and a fleet of equipment.
The combination of the new contract and the termination of work in Queensland has created a working capital shortfall.
To make up the deficit, Bounty has opted to raise equity capital by the issue of up to 25.8 million ordinary shares (15% of its issued capital) at 3c per share, to a number of non-related, sophisticated investors by the end of this month.
The company will seek shareholder approval for the issue of securities to directors at 3c per ordinary share at a general meeting, as well as approval for the share issue.
The meeting will be held as soon as regulatory requirements are met.
Bounty said it was confident about securing further contracts. It would be submitting tenders for two contracts before the end of April and was in ongoing discussions for at least two other projects.
Bounty shares were trading at 2c.