Metallurgical coal producer Bens Creek Group PLC (AIM:BEN) raised US$6mln in a convertible loan note to fund its expansion plans.
The cash, which will be drawn in US$500,000 tranches, will be used for acquisitions and working capital.
Specifically, the group is targeting metallurgical coal mines in North America, though it may look at coal mines that are not metallurgical but are “considered complementary to its business strategy”.
It is already evaluating prospective lease and royalty arrangements on neighbouring assets to the existing Bens Creek operation.
The debt, which carries an annual coupon of 15%, is exercisable at 28p, which represents a significant premium to the October IPO price of 10p price and a 14% discount to Tuesday’s close.
The lender is ACAM GP Limited, which is owned by a UK hedge fund manager and a US-based macro investor with over fifty years of combined experience, investors were told.
Chief executive Adam Wilson said: “We are delighted to put in place this unsecured convertible loan facility with a reputable institutional lender, which provides Bens Creek with the ability to access additional financial resources to take advantage of potential acquisition opportunities, that are relevant to the existing Bens Creek mine.”
Set over 10,000 acres in the Central Appalachian Basin straddling the border of Kentucky and West Virginia, the Bens Creek property has proven recoverable coal reserves of 2.34mln tons.