Bathurst capital raising

Peter McIntyre.
Peter McIntyre.
West Coast coking coal mine developer Bathurst Resources placed its shares in a trading halt yesterday, in anticipation of announcing a successful capital raising this morning.

Bathurst lodged details of the placement on the ASX, but only gave notice of a trading halt on the NZX, saying a competitive bookbuild was under way which would amount to 10% to 12% of Bathurst's capital at a discount of between 15% and 20%, the upper limits raising potentially $6.8 million.

From a share-price high of $1.74 in April 2011, Bathurst shares spent most of last year under 20c and since February have plunged further, trading about 8.2c yesterday, giving the company a market capitalisation of $67.4 million.

Craigs Investment Partners broker Peter McIntyre said Bathurst would be seeking to raise $6.5 million-$7 million.

''That and revenue from its other three [South Island] mines should be enough to get them through at least the next 18 to 24 months of care and maintenance,'' Mr McIntyre said of the stalled work on the Denniston Plateau, above Westport.

After two years of legal challenges by environmentalists over Bathurst's consents, which held up the start of mining production around Denniston, Bathurst was in late February forced to postpone starting plateau operations after global coal prices fell to an uneconomic $US120 ($NZ138) per tonne.

Bathurst said in a market update last month, under existing contracts, its domestic business could operate on a cash-positive basis through to 2016-17.

Domestic annual production was about 400,000 tonnes, with average production cash costs per tonne $75 to $85, while customer contract prices were in an average range of $105 to $115 per tonne, Bathurst said.

As at February, it had spent more than $300 million in acquisitions and mine development, held less than $9 million cash in hand and was forced to lay off staff and cut management salaries.

Its cash flows are restricted to three South Island boutique coal mines.

Bathurst raised $18.9 million last September.

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