The funding has been raised in two stages including $8.5m and $6.5m respectively from Beijing Guoli’s subsidiary Longluck Investment (Australia) that has a majority stake in Cuesta.
During the stage 1 placement, the company issued 82.5 million new ordinary shares to Longluck, while in the stage 2 placement it issued 63.1 million new ordinary shares. With these two funding tranches, Beijing Guoli’s stake in the coal firm has increased to 54.1% from previous 36.4%.
Cuesta Coal managing director Matthew Crawford said that the funding agreement with Beijing Guoli strengthens Cuesta’s balance sheet, besides allowing it to continue development works at Moorlands, specifically advancing the definite feasibility study.
"This is particularly pleasing given the challenging market conditions faced by emerging coal companies and the limited availability of funding," Crawford added.
"The continued support of Beijing Guoli will increase the likelihood of securing favourable project finance funding for the construction phase of Moorlands."
The funding is currently awaiting approvals from Chinese regulatory, FIRB, and Cuesta shareholder.
Moorlands project has current JORC resource of 281.1mt that also includes 171.2mt in the measured and indicated category in accordance to JORC code 2012. The definitive feasibility study is the extension of mine scoping study that revealed 1.9mtpa open cut mine for 30 years in the south pit.
