(MENAFN - ProactiveInvestors - Australia) Indus Coal (ASX: ICZ) has raised A6.6 million in a recent capital raising to move forward with the acquisition of an initial 38% interest in two companies that own three Indonesian coal projects in the well-known thermal coal producing region of Jambi Province.
Importantly, the new raising boosts the company's cash reserves to 9.1 million which is more than sufficient to settle the 6.5 million acquisition of the Jambi Coal Projects (Blocks 7, 8 and 9) in Sumatra, and undertake exploration.
Around 3.9 million of financing was raised by way of a placement of secured convertible bonds, which was arranged by Gleneagle Securities.
A further 2.68 million was raised via an equity issue of 15.76 million shares at 0.17 each and 15.76 million options on a one for one basis, exercisable at 0.17 before 31 October 2015.
CPS Securities was the Lead Broker to the equity issue.
Stage 1 acquisition
Under Stage 1, Indus will purchase a 38% shareholding in PT. Batanghari Energi Prima, the owner of Blocks 7 and 8, and PT. Berlian Mahkota Coal, the owner of Block 9.
Numerous operating, profitable coal mines are located in close proximity to the Jambi Coal Projects. Stripping ratios at these nearby coal mines are between 1:1 and 1:6.
Sumatra is also the location of Indus Coal's wholly owned MukoMuko Coal Project, for which the company now has a Production IUP, full environmental clearances and all necessary forestry permits, enabling the MukoMuko Coal Project to be brought into production.
The area is a well-known thermal coal producing region with a recognised export grade thermal coal product keenly sought after by Indian and Chinese power producers.
Mining in the area is typically a low cost, open-cut truck and excavator type operation and barged to the open sea from a river port, where it is then transhipped for delivery to export power markets.
By global standards, these are traditionally very low operating cost, very low CAPEX mining operations.
Well established existing local infrastructure, with available capacity, supports nearby coal mines which each produce 1 to 2 million tonnes per annum (Mtpa).
Nearby coal mines have been brought into production with low CAPEX budgets of only US5 million to produce 1 to 2Mtpa of coal per mine.
