Bathurst shares take a haircut on equity raising plan

BATHURST Resources aims to raise up to $110 million to further advance its Buller coking coal project in New Zealand, but the issue price helped its shares slide 16% yesterday.
Bathurst shares take a haircut on equity raising plan Bathurst shares take a haircut on equity raising plan Bathurst shares take a haircut on equity raising plan Bathurst shares take a haircut on equity raising plan Bathurst shares take a haircut on equity raising plan

Bathurst's Buller project

Blair Price

The explorer plans to place up to 253.4 million shares at 30c each to raise $76 million.

Another $34 million is expected from a 1 for 2 non-renounceable rights issue at 30c per share.

A shareholder meeting to approve the equity raising is scheduled for November 4.

Helmsec Global Capital will be lead manager of the share placement and rights issue.

The funds will complete Bathurst’s acquisition of the Buller project from L&M Coal Holdings.

“With the funds raised from the rights issue and the placement, Bathurst is on track to both complete the acquisition of the project and become a coking coal producer in the last quarter of 2011,” Bathurst managing director Hamish Bohannan said.

Bathurst first entered into an agreement with L&M over the project in late March.

The explorer has since set total resources of 47.1 million tonnes and reserves of 12.6Mt.

Bathurst plans to start mining the Escarpment deposit in the project in the December quarter of 2011 to produce about 650,000 tonnes of hard coking coal in an area containing old workings.

A ramp-up to 1Mtpa is expected in 2012 when mining starts moving into an area of virgin coal.

In the 2012-13 financial year, Bathurst expects the Deep Creek prospect of the project to start up.

This will double total production to 2Mtpa.

Two years later, the explorer hopes to kick off another open cut operation at the North Buller prospect to ramp up to 4Mtpa of product coal.

This expansion will require another wash plant and additional infrastructure.

Bathurst shares closed down 16.3%, or 7c, to 36c yesterday afternoon.