(MENAFN- ProactiveInvestors)
() has today consolidated its existing 73.1 million issued ordinary shares on a 1 for 10 basis into 7.3 million post consolidation ordinary shares after approval by shareholders on 28 October 2014.
The re-organisation is part of its transformation into a North American coal exploration and production company.
The company will be renamed as Pacific American Coal Ltd following the reverse merger with Texas and Oklahoma Coal Company.
It will also raise up to $5 million through the issue of 25 million new shares at $0.20 per share along with one free attaching option for every new share issued.
Pacific American Coal will have the option to acquire up to 80% of the operating P8 Mine in Oklahoma that is cash flow positive and has an existing contract with a local power station.
Shares in MFC will trade under the deferred delivery code MFCDA until the consolidation and holding statement for new shares are sent out on 28 November. Issue date for new shares is 4 December 2014.
Pacific American Coal is expected to list on the ASX on 5 December 2014.
The Texas and Oklahoma Coal Company
Pacific American Coal will complete a reverse take-over of the Texas and Oklahoma Coal Company at a deemed value of $11.1 million by issuance of 56 million shares and 16.8 million options.
The Company will also acquire an initial equity stake in the P8 Mine of 30% - 47% that is based on a fundraising range of $3.5-$5 million. An option is also held to increase the equity interest up to a maximum 80%.
P8 Mine is a producing coal mine held under mining lease and located in the Arkoma Basin of Oklahoma.
The mining lease contains both metallurgical and thermal coal types with a JORC Measured 8.97 million tonnes Indicated 4.37 million tonnes and Inferred 0.38 million tonnes for a total of 13.72 million tonnes.
It operates via a contracting agreement with South Central Coal Company which employs a skilled workforce of 73 people.
Since 2008 the P8 Mine has averaged an annualised output of approximately 450000 tonnes of “Run of Mine” production and projected a similar rate of Run of Mine production for 2015 to generate a surplus cash flow of US$2.0 million.
The mine currently produces a steaming coal with high ash 10500 Btu per pound / 5837 kcal per kilogram that supplies a local Oklahoma power station
MFC has evaluated potential for production of a higher value PCI which is a pulverised coal that is suitable for steel making that is recovered by crushing screening and washing of Run of Mine coal.
This will require installation of a coal handling preparation plant which will be carried out over the next 24 months.
The P8 Mine is located 30 kilometres south of the coal barging river ports at Van Buren and close to water power rail links and Fort Smith with a population of 86000.
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