In addition, Admission will potentially provide the Group with access to further capital in the future, should the Directors identify new acquisition opportunities which meet the Group's strategic objectives. The Company has adopted a mining plan designed to increase production at its mines. The fulfilment of that plan will require the Group to secure further external funding (in addition to the Placing Proceeds) as the mines are developed and production is increased. Such funds would be needed in order to finance further capital expenditure, for example, additional longwalls and improved processing facilities as production increases.
The Directors intend to introduce continued improvements and efficiencies to current mining practices in order to enhance the cash generative activities at the Menzhinsky Mine. The Directors will focus on optimising return from the New Wash Plant over the near term and will only commence construction of the Verticalnaya longwall once they are satisfied that the wash plant is operating sustainably at a satisfactory level.
Further investment in capital expenditure for the development of additional longwalls will be made only once the Directors are satisfied sufficient funds are available. In the event that the no further funds are available then aspects of the current mining plan would be deferred until such time as cash reserves were built up from the washing operations at Waste Tip No. 4 to fund additional plant on the terms then available.
The Placing proceeds and the proceeds of the Salida loan to be satisfied with the concurrent shares for debt settlement will be utilised as follows:
-- Capital Expenditure CAD$5.9 million;-- Repayment of debenture CAD$1.5 million;-- Working capital CAD$4.8 million; and-- Transaction fees CAD$2.9 million.
Mr. Colin Stocks AMIMinE, IEng, is a Qualified Person in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects. Mr. Stocks has read and approved the contents of this news release.
This announcement includes "forward-looking statements" which include all statements other than statements of historical facts, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations, or any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would, "could" or similar expressions or negatives thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this document. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based unless required to do so by applicable law or the AIM Rules for Companies.
Definitions"EastCoal" or the "Company" EastCoal Inc. a company incorporated in British Columbia with incorporation number BC0318912 and having its registered office at 20th floor, 250 Howe Street Vancouver, British Columbia"East Coal Company" East Coal Company LLC, a company incorporated in Ukraine"Inter-Invest" Inter-Invest Coal LLC, a company incorporated in Ukraine"Menzhinsky Mine" An underground coal mine, located in Lugansk oblast (province) on the eastern side of Ukraine, (sometimes known as the Maria Glubokaya mine)"New Wash Plant" The new wash plant installed at the Menzhinsky mine"Verticalnaya Mine" A coal mine located in the Dolzhano-Revenetskiy region of Donbass"VNP" The Verticalnaya North Project, an early production project at the Verticalnaya Mine
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