Allegiance Raises Cash for New Elk
By Esmarie Iannucci
February 22, 2021 - ASX-listed Allegiance Coal has raised A$15-million through a private placement to sophisticated and professional investors, to fund refurbishment activity at its New Elk coal mine, in Colorado.
The company placed 187.5-million new shares, at a price of 8c each, representing a 15.8% discount to its last closing price and a 19.5% discount to its five-day volume weighted average share price.
The placement will be made under Allegiance’s existing placement capacity, with the company noting that it would also issue 5.6-million broker options, exercisable at 10c each on or before March 2024.
The funds will go towards the refurbishment of mine and equipment at the New Elk mine, completing the environmental assessment application for its Tenas project, and for debt repayment and general working capital.
Allegiance is hoping to bring New Elk into production by mid-2021.
“As we finalise our $15-million debt facility, the capital raising will support the development of New Elk for first production in mid-2021, alongside progressing our Tenas asset in conjunction with joint venture partner Itochu,” said Allegiance chairperson and MD Mark Gray.
“Having already optimized startup capital for New Elk to $13.5-million, including working capital, the company is committed to fast-tracking coal sales with the combined New Elk development and blending strategy.”