The move comes as the embattled former coal baron is being pursued by creditors and after his Bentley company and joint venture vehicle Trepang were knocked back by the Australian Securities Exchange in their efforts to convert Western Australian oil and gas junior Orca Energy into a $20 million cash box company.
An earlier attempt by Tinkler to buy Peabody Energy’s Wilkie Creek coal mine in Queensland was also stymied by funding issues.
“Australian Pacific Coal has a number of exciting projects adjacent to existing large-scale operations,” Tinkler said of the Auspac deal, under which Bentley and Trepang would each take a 42.5% stake in the company by buying $6.6 million of new shares at 0.4c each through a placement.
“We intend to expedite the progression of these projects following completion of the proposed transaction. Our aim is to create significant value for all shareholders, as these projects move forward from exploration to potentially production in the coming years.”
Auspac’s former exploration partner Rio Tinto chose not to exercise an option to buy its Hillalong coal project in Queensland.
As a consequence Rio Tinto was obliged to return all of its interests in EPCs 1773, 1867 and 1645, including exploration data, to Area Coal, a 100% owned subsidiary of Auspac.
Auspac said that it would also undertake a non-renounceable entitlements issue to raise up to $1.42 million before costs.
“The funds raised from the placement and entitlements issue will place the company in a strong financial position to progress and expedite the exploration programs planned for the company’s existing suite of coal assets in Queensland,” it said.
“The company’s first priority post the completion of the placement and entitlements issue is to investigate the potential for a standalone open cut metallurgical mine at the Hillalong project area formerly subject to an option agreement with Rio Tinto.
“Hillalong is located adjacent to Rio Tinto’s Hail Creek mine, one of Queensland’s premier coking coal mines, located approximately 120 km southwest of Mackay and 35km northwest of Nebo.”