Golden Energy and Resources (GEAR) is subscribing to a placement for 33.3 million new shares in Australian-listed metallurgical mining company Allegiance Coal at 45 Australian cents (46 cents) per share, totalling to approximately A$15 million.

The subscription constitutes up to 12% of Allegiance Coal’s enlarged total issued share capital. The placement is expected to complete on May 10.

The placement price is payable in cash and will be funded from GEAR’s existing cash resources.

SEE:Golden Energy and Resources to sell 4.5% of GEMS sale shares it owns for US$50 mil

While listed on the Australian Securities Exchange (ASX), Allegiance Coal is based in Vancouver, Canada, with its operations focused in North America and Western Canada. It owns the New Elk metallurgical coal project in Colorado, USA and the Telkwa metallurgical coal project in British Columbia, Canada. 

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According to GEAR’s filing to SGX dated May 5, the placement is not expected to have any material impact on the net tangible assets per share or earnings per share of the group for FY2021 ending December.

Shares in GEAR closed 0.1 cents or 0.64% lower at 15.6 cents on April 30.