Bens Creek Group PLC (AIM:BEN, OTC:BENCF) raised £6.0mln, before expenses, to help fund its transition to an equipment owner and operator and move away from using contractors.
The group raised about £3mln through the placing of almost 10mln shares at 30p per share. It also issued about 10mln new shares, at the same price, to major shareholder MBU Capital Group Ltd, Mohammed Iqbal (the beneficial owner of MBU) and Bluestar Global Capital Ltd.
The issue price represents a 10.4% discount to yesterday’s closing share price and shares in the AIM-listed company were down 3.7% at 32.25 by mid-morning trading.
Bens Creek, which owns a metallurgical coal mine in North America, expects its transition to an equipment owner to result in increased production and cost efficiencies.
“The net proceeds from this placing and subscription will enable us to fulfil the next stage of our growth strategy which is to move away from a contractor model and become an owner of our own rolling stock of heavy equipment,” said chief executive Adam Wilson. “As such we have already started to acquire a fleet and with this fundraise, we will be able to fulfil this objective with new equipment from Komatsu.”
The company recently completed the outright purchase of its initial fleet of mining and earth-moving equipment for US$5.4mln, funded from existing cash resources.
“When we listed on AIM, we had no choice but to engage a contractor to help us with this advancement, however as we now look to exceed the initial monthly production target of 40,000 and move towards our target of circa 70,000 - 80,000 tons per month, as previously announced, it is important that we own the equipment fleet so that we are able to keep at least two highwall miners operational simultaneously,” said Wilson.