Queensland-based and Australian-listed Galilee Energy Ltd, whose working coal deposits are in Southland and the West Coast, has confirmed it wants to float a company this month to raise cash for future exploration and development.
Galilee Energy operates the Takitimu coal mine at Nightcaps in Southland and the Cascade coking coal mine near Westport on the West Coast, plus has other joint venture developments around New Zealand.
In Queensland, it is in a venture with AGL Energy Ltd, one of Australia's largest energy companies, which is investing $A37 million ($NZ48.4 million) for a production pilot, exploration and appraisal programmes with the firm in the Galilee Energy basin there.
Galilee Energy's board hopes the initial public offering later this month, which will be placed into a separate Australian company listed on the ASX, will be for new shares in Eastern Resources Group Ltd, the holding company of Galilee Energy's New Zealand coal assets.
A priority offer of about 50% of the new shares will be for existing Galilee Energy shareholders. Galilee Energy will have a "significant minority stake", the board says.
While no details had been released on the size of the initial public offering, Craigs Investment Partners broker Peter McIntyre noted Australian-listed Bathurst Resources Ltd was considering a capital-raising of up to $143 million to develop a coking coal operation adjacent to state-owned enterprise Solid Energy's Stockton holdings on the West Coast.
Galilee Energy, which posted a $A1.66 million profit for the year to June, would be heartened by miner Pike River having got two export shipments away and Bathurst Resources seeking to raise development capital.
Interest in providing the specialist high-grade coking coal, for which demand is increasing in China and India, has been intensified by forecasts of rising prices.
