Continental Coal (ASX: CCC) has a new substantial shareholder with U.S. investment group Socius CG II now holding 6.86% of Continental.
The deal with Continental and Socius is a way for Continental to accelerate payments to acquire the outstanding 35.9% in Mashala Resources, which was announced at the end of last week.
Continental made a placement to Socius of 234,962,406 new shares at A$0.043 to raise US$10 million, and issued 117,481,203 unlisted 5 year warrant options at A$0.044.
A subsequent tranche will be completed with Socius at a price that will be determined at premium to the market share price at the time of draw down.
The proceeds of the first tranche of the placement will allow the company to increase its shareholding in Mashala from the current 64.1% interest to up to a maximum 83.3% interest.
Socius shareholding in Continental in time will increase to over 12.3%, providing a big vote of confidence in the company's South African coal operations.