04/06/14 – Balamara Resources bags USD 5 million for Nowa Ruda Coking Coal project in Poland
Proactive Investors reproted that Balamara Resources has secured a USD 5 million direct equity investment into its flagship Nowa Ruda Coking Coal Project in Poland to underpin ongoing resource drilling and feasibility works.
Balamara’s major shareholder, Hong Kong-based Ample Skill, has agreed to invest USD 5 million into Balamara’s local Polish subsidiary, Coal Holdings, which holds the rights over the Nowa Ruda Project.
The transaction will be subject to shareholder approval with funds to be transferred over a period of three months; USD 3 million post approvals and USD 1 million to be made each subsequent month thereafter.
Once completed, this investment will give Ample Skill a direct 15% equity interest in the Nowa Ruda Project along with a 37% stake in Balamara.
This investment in Coal Holdings reflects a valuation in the Nowa Ruda Project of approximately USD 36 million, which is a strong endorsement of the significant progress made by Balamara since acquiring the asset in July 2013, and greater than the company’s current market cap of USD 32 million.
It also removes any necessity for a further capital raising and associated dilution at the Balamara corporate level over the near term.
The investment by Ample Skill is expected to cover the cost of completing the Nowa Ruda drilling and feasibility costs through to mid-2015, when it is targeting a decision to mine and project development funding.
The Company is currently undertaking a 5-hole resource definition drilling program at Nowa Ruda in conjunction with consultants Wardell Armstrong International, and may add a further two holes to extend the JORC resource at the Lech deposit.
All drilling is expected to be completed by the end of 2014 with updates to the JORC resource to be published at various intervals during the year.
In parallel, Balamara is working through the Nowa Ruda Feasibility Study with programs underway in all key areas, including infrastructure, mine planning, mine design, coal quality, environmental studies, discussions with potential off-take partners and potential funding solutions.