Kangaroo Resources intends to use the US$14 million raised through a convertible note instrument to further develop its coal projects in Indonesia.
In particular it will focus on ramping up production and continuing exploration at the Mamahak Coking Coal project.
At Mamahak the funds will be used to lease additional mining equipment and infrastructure to expand the mineable tonnes currently achievable on existing reserves, to secure contracts for additional barges to ship coal down the Mahakam River to coal terminals for sale, and to progress further drilling as required in a bid to expand the existing JORC resource inventory and ore reserves within the concession area.
The funds will also provide Kangaroo with additional working capital to enable the it to deliver on its overall production objectives.
Kangaroo is shipping the initial 50,000 tonnes of coal from Mamahak to the coal terminal for delivery into existing coal sales agreements. The company intends to secure additional barges to expedite this delivery and standardize its logistics.
Kangaroo’s managing director Mark O’Keeffe says, “The completion of this funding represents a tremendous result for the company, which has been achieved in a very challenging market environment.
“We have a great portfolio of coal assets in Indonesia and these additional funds will enable the company to build on the production base it has already established.”
Kangaroo Resources has interests in eight advanced coal projects in the East Kalimantan region of Indonesia.
The projects host significant coking and thermal coal resources which will see Kangaroo emerge as a significant Indonesian coal producer, with first production achieved in December 2009.