Blumont Group to buy 12.8% stake in Australia-listed coal miner for $11.2 million

Locally-listed Blumont Group announced that it had entered into a conditional agreement to buy a stake in Cokal Limited.

Cokal, which is listed on the Australian Securities Exchange, is a coal producer with exploration tenements in Central and West Kalimantan, Indonesia, and Tanzania.

The agreement is part of Blumont's search for new investment opportunities in the mineral resource sector.

As part of the deal, Blumont will take up about 60.1 million shares in Cokal at 16 Australian cents apiece, amounting to a total of A$9.6 million (S$11.2 million) or a 12.75 per cent stake in the enlarged capital of Cokal.

Proceeds from the share placement will go towards the planned drilling and detailed engineering plans for Cokal's Bumi Barito Mineral project in Central Kalimantan and general corporate purposes, said Blumont.

It also said that the investment will be funded in cash from its internal resources.

This is Blumont's third investment in a resource-based company and is in-line with its strategy to enhance shareholders' value.

The other recent deals include its stake in Hudson Minerals Holdings and Celsius Coal, which is also an Australia-listed company.

Two other institutional investors - Passport Capital and Blackrock Investment Manager - are also pumping money into Cokal.

The funds raised from all three placements amount to A$28.55 million.

Executive director of Blumont, James Hong, said: "We have seen tremendous opportunities in the minerals and energy sectors and are pleased to strengthen our exposure to the coal sector with this latest investment in Cokal."

Blumont shares closed 0.86 per cent up at $1.18.