Celsius Coal has received the first tranche of a $10 million strategic funding arrangement with the Singapore-based Blumont Group which will pay for its 2013 exploration and development program. The $5 million payment was received in return for more than 227 million Celsius shares.
Celsius’ managing director Grant Thomas says this tranche of funding is the first step in a long and fruitful strategic alliance. “This funding provides the comfort required to continue with our accelerated physical exploration program and enables us to focus on further proving up our existing projects in Kyrgyz Republic. However, we are also excited for the opportunity to review other potential projects in Central Asia with Blumont, which we hope will build on our current portfolio.”
The second $5 million tranche will be received in the second half of 2013 with the convertible note facility provided by Blumont, being drawn.
Celsius and Blumont will now review additional investment opportunities in Central Asia and the two companies will each provide a director for their partner’s Board, Celsius has nominated Alexander Molyneux to take on a position at Blumont.
“We are already planning an accelerated physical exploration program to commence this northern hemisphere spring,” says Grant Thomas. The company has announced a maiden total inferred, JORC-compliant resource of 255 million tonnes at the Uzgen Basin project, comprising 230 million tonnes at Kargasha and 25 million at Kokkia.
Celsius is Blumont’s second investment in mining bulk commodities, after the company announced the proposed acquisition of Hudson Minerals in December 2012.
Celsius Coal is focused on developing coking and thermal coal deposits in the Kyrgyz Republic and holds an 80% interest in the Uzgen Basin coking coal project. Recent results of washability testing at Kargasha confirmed it has excellent potential for beneficiation of coking coal, with a product ash range of between 2.5% and 9.4%.
Celsius is now progressing further testing to analyse for phosphorous, sulphur content, ash composition, ultimate and more extensive coking properties.