Aquila said this morning it would issue up to 29,297,608 shares to recognise its progress over the past 12 months and its deal with Baosteel.
The free shares will be issued for nil consideration and will be distributed to existing shareholders, who will receive one bonus share per 10 held. Existing shareholder status will be cut off at December 9.
Aquila hopes the entitlement will improve its chances of being included in the ASX100 index.
At the company’s AGM on Friday, Aquila executive chairman Tony Poli said there was potential for a large inflow of funds from the sale of the company’s 24.5% interest in the $2 billion Belvedere coking coal project to Vale by mid-2010.
Having already gained significant project status from Queensland Coordinator-General Colin Jensen, Belvedere’s prefeasibility study is investigating potential production of 9 million tonnes per annum, including two longwall operations with combined output of 7Mtpa.
Vale purchased its majority stake in the Bowen Basin project back in 2007 and holds a six-month option to purchase Aquila’s remaining stake from December.
Aquila is also prepared to sell up to 40% of its 4Mtpa open cut Washpool coking coal project in central Queensland.
Back in May, Poli told ILN the company was scouting for potential offshore investors for Washpool, also in the Bowen Basin.
Aquila expects to complete the Washpool feasibility study by the end of March.
Poli said the company’s Isaac Plains coal mine would welcome a new dragline in the last three months of 2010, but still needed environmental approval.
He said the mine had successfully ramped up with additional port capacity provided by the Dalrymple Bay Coal Terminal.
The second phase ramp-up targeted 2.8Mtpa of metallurgical coal.
Meanwhile, the definitive feasibility study for the Eagle Downs project is expected in April 2011.
The underground mine will target 4.6Mtpa of hard coking coal from a single longwall and up to 8Mtpa once a second longwall is installed.
In Western Australia, Aquila’s definitive feasibility study for the west Pilbara iron ore project is due mid-2010.
Poli said the development decision for the project would be made shortly afterwards.
Aquila holds a 40% stake of the project, which is targeting 30-40 million tonnes per annum with shipping through Anketell Port.
Poli said a resource increase was expected for the project’s Hardey deposit.
In South Africa, the debut resource estimate for Aquila’s 74%-owned and prospective 2.5Mtpa Thabazimbi iron ore project is expected by mid-2010.
The company’s 74%-owned Avontuur manganese project in the country will move into the feasibility study phase during the March quarter.
Poli said a revised resource estimate was also due in this period. At this stage, a 1Mtpa operation for 15 years is planned.
Looking ahead, Poli said Aquila had a strong financial position with $360 million in cash and liquid assets.
The recent deal with Baosteel, which bought a 19.99% stake of Aquila as its first foreign equity purchase, can also reap strategic dividends.
Cooperation between the two companies could lead to Chinese bank financing and further investment from Baosteel.
Poli noted Baosteel traditionally led annual iron ore price negotiations, hosted 30Mtpa of steelmaking capacity and had generated $US36 billion of revenue in 2008.
Shares in Aquila closed down 4.22% on Friday before rising 8.9% by mid-morning today to $A10.64.
