Bathurst Resources announces capital raising plan

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Bathurst Resources, which has cut jobs and delayed the start to its controversial Escarpment open-cut mine on the Denniston Plateau pending a recovery in coal prices,
may raise up to $6.87 million in a discounted share placement.

The mining company had its stock halted from trading on the NZX and ASX for the capital raising. A competitive bookbuild is underway as part of a placement that would amount to 10 percent to 12 percent of Bathurst's capital at a discount of 15 percent to 20 percent.

The detail was included in Bathurst's statement to the ASX, but not in its statement to the NZX, where it notified only that the shares were being placed in a trading halt pending announcements about a capital-raising, due tomorrow morning.

The capital-raising would raise $6.87 million assuming it sold 12 percent of its capital at a 15 percent discount. The shares last traded at 8.2 cents, valuing the company at $67.4 million, having shed 59 percent in the past 12 months.

Bathurst said it is liaising with an overseas intermediary on behalf of some potential participants in the placement and doesn't yet have full details of their obligations. The placement is conditional on achieving a minimum bookbuild, it said. The company didn't identify the parties or give details of the bookbuild.

According to notes for a briefing last month, Bathurst's biggest shareholder was Coupland Cardiff with 13.3 percent. Other institutions held 28 percent and retail investors accounted for 46.8 percent of the stock.

A key focus was the establishment of the Escarpment mine in preparation to enter export markets once markets recovered, it said last month. Capital requirements for stage 2 production included $2 million of working capital, $2 million for infrastructure at the site and about $1 million for new washing/separator technology.

In February, the company said it would cut 29 jobs as it hunkered down to ride out the lowest world prices for coking coal in the last nine years.

Bathurst won resource consents for Escarpment near Westport last October, more than two years after initial consents were appealed by environmental groups. In the meantime, prices slumped to the extent that there would be no margin in extracting coal from the new mine.