Beacon Hill launches $25m cash call to fund African coal project

PRODUCER Beacon Hill yesterday unveiled a share sale of up to $25m (£17m) to fund its coal project in Mozambique.

Beacon Hill, which is dual-listed on Aim and the Australian Securities Exchange, wants to raise between $15m and $25m in a two-tranche cash call.

The company, which has three projects in Mozambique and Australia, will place new shares of 25p each with institutional and other investors through a bookbuild process.

The proceeds will be used to expand and upgrade rail infrastructure – including rail sidings – on the Minas Moatize project in the southern African country, as well as for working capital on the project until it becomes cash flow positive later this year.
The funding will also be used to take the Mozambique operation to full-scale production of coking coal.

Beacon Hill added that it was in discussions with its lenders about a secured debt facility to fund the project, as well as talks over refinancing a $10m debt facility with trader Vitol Coal.

Justin Farr-Jones, chairman of Beacon Hill, said that the placing had received “strong institutional demand” to date.

The first tranche of shares should begin trading on the junior stock market and the Australian stock market next week.

Shares closed down 12.9 per cent yesterday at 3.38p, as investors reacted negatively to news of the share placing.

ADVISERS BEACON HILL SHARE PLACING

TIM REDFERN
CANACCORD GENUITY

Canaccord Genuity is acting as joint bookrunner, broker and financial adviser on Beacon Hill’s $25m share placing.

Tim Redfern, Andrew Chubb, Seb Jones and Joe Weaving are acting for the firm on behalf of Canaccord Genuity.

Redfern, director of broking at Canaccord, is leading the team on the deal.

Redfern has 16 years worth of experience in equity capital markets, corporate broking and advisory services.

Prior to joining Canaccord, Redfern worked for Evolution Securities. He has extensive transactional experience, paticularly in the natural resources space.

Most recent deals he has worked on include IGas Energy’s £23m placing in January, to fund its search for shale gas. Redfern also advised IGas on its acquisition of onshore oilfields from Providence Resources last September.

Other natural resources companies he has worked with include Petroneft – most recently on its $17.25m share placing last October – Amara Mining (previously known as Cluff Gold), Emblaze, Afferro Mining, Green Dragon Gas and European Goldfields. Outside of this space, Redfern has acted for Monitise, Lombard Medical Technology and Netcall. Last September, he advised defence contractor Manroy on a £484,500 share placing.

Emerging market-focused Renaissance Capital is acting as joint bookrunner for Beacon Hill, with managing director John Porter and vice president Nikita Turkin on the team there.

In January last year, Porter acted for RusPetro on its London initial public offering, and he has also acted for AIM-listed Roxi Petroleum.