COAL Asia Holdings Inc. (Cahi) has earmarked P587.26 million for the continued exploration and development of its two mines in Mindanao.
The company said on Tuesday it infused such amount for the coal mines it held via its wholly owned subsidiary Titan Mining and Energy Corp. (TMEC) using the proceeds of its initial public offering (IPO) made two years ago.
Cahi said it has allotted P408.11 million and P52.28 million for its Davao Oriental and Zamboanga-Sibugay coal mine projects, respectively. Prior to these fundings, it also withdrew P126.87 million as its working capital for the fourth quarter of 2012.
With its net IPO proceeds of P726.87 million less the total disbursements, the balance stood at P139.61 million as of June 30, 2014.
Incorporated on June 11, 2012, Cahi is engaged in coal mining and energy-related business. It produces less than 100,000 metric tons (MT) of high-grade coal annually.
Given its full ownership of TMEC, it holds the country’s second-biggest coal reserves and resources, with the identified 120 million of “potential deposit” for both mining facilities.
The firm raised funds for the two mines by offering 800 million primary shares at a par value of P1 each, which accounts for 20 percent of its expanded capital.
Due to advanced completion of drilling and exploration activities in the Davao Oriental mine, its commercial production already commenced in October last year, a few months ahead of the original schedule in January 2014.
The accomplished pre-feasibility study on this facility showed it has “proved and probable” reserves of 7 MMT.
Meanwhile, the Zamboanga-Sibugay mine is set to become fully operational by next year.
For this year, Cahi’s yearly production is expected to increase to up to 600,000 MT as net income is seen to hit P500 million since the Davao coal mine started its operations.