By Esmarie Swanepoel

May 21, 2018 - Coal developer Paringa Resources has announced a A$30-million capital raising to fund the development of its Poplar Grove coal mine, in the Illinois basin, Kentucky.

The company on Monday said that some A$19.2-million had been raised through an institutional entitlement offer, which was priced at 22c a share.

The offer price represented a 34.3% discount to Paringa’s last closing price on May 17, and a 24.9% discount to the company’s five-day volume-weighted average price.

The retail component of the entitlement offer, which is fully underwritten, is expected to raise an additional A$11-million.

Eligible retail shareholders will be invited to subscribe for one new share for every three shares held on the record date, at an offer price of 22c a share. The retail entitlement offer will open on May 24 and will close on June 7.

The funds raised will go towards the development of Poplar Grove mine, where production is targeted for the fourth quarter of this year.

The 2.8-million-tonne-a-year Poplar Grove thermal coal mine forms part of Paringa’s 40 000-acre Buck Creek complex, which also contains the 3.8-million-tonne-a-year Cypress mine, where construction is set to begin in 2019.

Paringa is hoping that the Poplar Grove mine will be cash flow positive by the second quarter of 2019, delivering earnings before interest, taxes, deprecation and amortisation of about A$41-million by 2020, when in full production. 

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