Bens Creek announces admission to AIM

Upon admission, the company will have a market capitalisation of £35 million, following a successful total fundraise of £7 million (before expenses) at the placing price of 10 p per ordinary share (the placing).

The net funds raised on admission of approximately £5.8 million will be used to finance the Group’s mining operations, including:

• The refurbishment of the company’s coal preparation plant and railroad.
• Infrastructure repair.
• The acquisition of mining equipment.
• Working capital.
• To repay certain short-term debt facilities, which have been used to continue the capital expenditure, owed to MBU Capital Group Limited, the company’s major shareholder.

Adam Wilson, CEO of Bens Creek, commented: “We are delighted to start trading on AIM today. We experienced substantial investor demand and our placing was significantly oversubscribed. Investors clearly recognise that high quality metallurgical coal is a scarce commodity and the price has historically been significantly higher than for that of thermal coal, given that it is a critical input in the steel production process.”

“We expect the business to have low levels of debt combined with robust operating margins, and we expect to generate significant operating cash flows from our operations by utilising contract miners who will supply labour, equipment, and materials.”

Metallurgical coal assets in West Virginia, USA

The company owns and operates a metallurgical coal mine located on 10 000 acres on the southern part of the state of West Virginia and eastern edge of Kentucky, in the central Appalachian Basin of the eastern US. The mine’s operations are located primarily in Mingo County, West Virginia. The mine includes a wash plant and rail loading facility located on the freehold land.

The underground and surface mines owned by the Group, the Pond Creek Mine and the Lower Alma Lower Bench Mine, have been dormant since 2014 and 2009 respectively. The Group’s primary objective will be to move the first underground mine into production by the end of 4Q21 and the company’s immediate priority will be to deploy part of the net proceeds from the placing in pursuit of the work programme. The company may also in the future seek to make further acquisitions of metallurgical coal mines in North America.

Key assets and infrastructure

• 17.2 million in-place t of metallurgical coal resources.
• Proven and probable recoverable coal reserves of 2.34 million t (Lower Alma and Pond Creek mines).
• Coal preparation plant and rail loadout facilities in good condition, built in 1992 with a nominal throughput of 500 tph raw coal.
• Froth flotation circuit allows recovery of ultra-fine material, improving plant recovery.
• Fast flood rail load out.
• Refuse disposal area adjacent to the preparation plant designed as a combined fill refuse structure (rather than a dam).
• Ancillary infrastructure includes coal bins, office and storage trailers, electrical substations, power lines and truck scales.
• A new decanter screen-bowl dryer installed in 2011/2012 to reduce moisture levels in flotation product.
Direct access to domestic markets through the Norfolk Southern Railway Company’s rail network and to export markets through the Lambert’s Point Export Terminal in Norfolk, Virginia.

Wilson added: “Metallurgical coal is a daily priced, homogenous, and easily tradable commodity. We have proven reserves with logistical advantages and operational infrastructure in place. There are already several active mining contractors in the state of West Virginia, and we intend to commence operations in 4Q21, which will help to create employment and stimulate the local economy.”

“The macro picture currently looks favourable, with strong global demand for steel, not least in the US, where President Biden announced early this year a US$2 trillion plan to overhaul and upgrade the nation’s infrastructure, including plans to spend on roads, bridges and other physical improvements.”

The company is being advised by Allenby Capital Ltd, who are acting as nominated adviser and joint broker, together with Optiva Securities Limited as joint broker. Clear Capital Markets Limited acted as placing agent for the company.

Read the article online at: https://www.worldcoal.com/coal/22102021/bens-creek-announces-admission-to-aim/