ATC Atlantic Coal

TIDMATC

RNS Number : 0996K

Atlantic Coal PLC

25 July 2013

Atlantic Coal plc / Index: AIM / Epic: ATC / Sector: Mining

Atlantic Coal plc ("Atlantic Coal" or the "Company")

Up to US$5 million loan facility backed by a SEDA

Atlantic Coal plc, the AIM listed anthracite coal mining company operating in Pennsylvania, USA, is pleased to announce that it has entered into an agreement with YA Global Master SPV Ltd, an investment fund managed by Yorkville Advisors Global LP ("Yorkville") under which YA Global Master SPV Ltd will provide an up to US$5 million loan facility (the "Loan Facility") backed by a standby equity distribution agreement ("SEDA") and subject to the issue of warrants.

The US$5 million raised will be used by Atlantic Coal to develop the 410 acre Pott & Bannon site, which is located 25 miles from the Company's producing Stockton Anthracite Colliery and for working capital purposes. Atlantic Coal plans to purchase machinery and conduct hydrology and engineering studies to prove up the reserves at the Pott & Bannon site which it believes currently stand at approximately 13.6 million tons run-of-mine ("ROM") coal, equating to approximately 4.1 million tons of washed, saleable anthracite. These estimates have been previously announced and are based on information provided to the Company in January 2012 and is outlined in a report commissioned by the Reading Anthracite Company (the previous owner of the Pott & Bannon site) in January 1999 and prepared by John T. Boyd & Company. This is in line with the Company's strategy to increase anthracite production in the Pennsylvanian Anthracite Field.

Atlantic Coal's Managing Director Steve Best said: "This loan facility with Yorkville provides Atlantic Coal with ready access to funds at a time of significant growth and development. We are focussed on driving the recently acquired Pott & Bannon site towards production. We believe the Pott & Bannon site contains approximately 4.1 million tons of washed and saleable anthracite and we are looking to increase our revenues from our coal mining assets in Pennsylvania. We look forward to announcing the results of our forthcoming studies.

"Anthracite prices have been depressed over the last year and suppliers have sought to reduce inventory. Atlantic Coal has weathered this period successfully and the loan facility will provide us with additional financial security should prices remain depressed."

Details of Loan Facility

An initial tranche of US$750,000 will be available for immediate drawdown followed by a second tranche of USD$750,000 subject to conditions. Further tranches may be available subject to further conditions being met. The first two tranches are subject to an arrangement fee of 7% and each tranche is repayable over 12 months with interest at 10 per cent. per annum. Any subsequent tranches are subject to a 9% arrangement fee and 10% interest. Alternatively Atlantic Coal may elect to draw on the SEDA facility to make repayment of funds drawn down under the Loan Facility.

Details of SEDA Facility

Subject to its terms, the up to US$4 million SEDA facility can be drawn upon at the discretion of the Company. Under the terms of the agreement, Atlantic Coal may draw down on funds over a period of up to three years in exchange for the issue of new ordinary shares of 0.07p each in the Company (the "New Ordinary Shares"). The New Ordinary Shares will be issued at a 5% discount to the prevailing market price during the 10 dealing day pricing period of a draw down. The Company may also set a minimum price for each draw down. The maximum advance that may be requested is 200% of the average daily trading volume of Ordinary Shares multiplied by the volume weighted average price of such shares for each of the 10 dealing days prior to the date of the draw down request.

The facility may only be drawn down upon once every 10 days. A fee of GBP80,000 is payable by the Company, half of which is payable six months after signing the SEDA and the balance 12 months after signing.

Warrants

Atlantic Coal will issue warrants to Yorkville equivalent to 25% of each tranche drawn converted into sterling at the exchange rate on the transfer date divided by the market price on that day and with a subscription price of 125% of the closing price on the transfer date.

**ENDS**

For further information on the Company, visit: www.atlanticcoal.com or contact:

 
 Steve Best         Atlantic Coal plc           Tel: 020 3328 5670 
 Nick Naylor        Allenby Capital Limited     Tel: 020 3328 5656 
 Mark Connelly      Allenby Capital Limited     Tel: 020 3328 5656 
 Elisabeth Cowell   St Brides Media & Finance   Tel: 020 7236 1177 
                     Ltd 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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