Leigh Creek Energy Ltd (LCK) has completed the sale of the final tranche (6 263 802 shares) of the remaining Treasury shares owned by LCK. Approximately 80% of these shares have been placed with US domiciled funds, with the remaining shares committed to Australian investors and to be finalised over the coming days. This final tranche will raise AUS$1.63 million before applicable costs.
LCK owned shares in itself as a result of the acquisition of ARP TriEnergy Pty Ltd (TriE) and then re-listing in July 2015. TriE owned 15 million shares at the time of its acquisition and the original purchase price of these shares was AUS$0.037 per share for a total of AUS$555 000.
The cumulative sale of the 15 million Treasury shares will have raised a total of AUS$3.428 million (gross) for an average sale price of AUS$0.229 per share creating a gross profit on sale of AUS$2.873 million. LCK has used the purchase and the sale of these shares as a mechanism to fund its operational needs without additional dilution to shareholders in the early stage of its efforts at the Leigh Creek Energy project (LCEP).
LCK was required by the regulator to dispose of the Treasury shares it owned by July 2016.
David Shearwood, Managing Director of LCK commented: “The use of Treasury shares to fund the early stage of LCK has been a success by creating an extra AUS$3 million in non-dilutive capital. This mechanism has permitted LCK to reach the stage of gas supply contract negotiations without the need to dilute existing shareholders and follows the recent delivery of independent certified 2C recoverable gas resources.”
Shearwood continued: “Importantly as we now work towards securing gas contracts, we are concurrently intending to monetise some of our gas resources in order to again reduce our need for equity. This may come in many forms, from gas options, to gas pre-payments, sale of gas in ground or sale of a part of the LCEP itself. The board of LCK is open to all possibilities as financial modelling indicates the rate of return to shareholders is significantly enhanced by gas monetisation.”
“I am very pleased with the progress of gas sales discussions which are being driven by Mr Garry Marsden, our General Manager Commercial, as we work towards bringing our gas to market and provide an additional source of gas to the supply constrained Australian east coast gas market,” stated Shearwood.
He concluded: “This is an exciting time for our staff, shareholders and our wider stakeholders and I take this opportunity to thank all of you for your efforts and invaluable support. I look forward to updating investors frequently with additional news.”
Edited from press release by Harleigh Hobbs
Read the article online at: https://www.worldcoal.com/coal/16022016/lck-completes-treasury-share-sale-to-fund-early-stages-of-lcep-251/