LONDON, UK: Bens Creek Group, the owner of a metallurgical coal mine in West Virginia, has proposed admission of its ordinary shares to trading on the AIM market of the London Stock Exchange, which is expected to take place on 19 October 2021.

The Company has raised £7.0 million, conditional on admission, giving it an expected market capitalisation of £35 million at the placing price of 10p per ordinary Share.

Bens Creek Group owns and operates a metallurgical coal mine located on 10,000 acres on the southern part of the state of West Virginia and eastern edge of Kentucky, in the central Appalachian Basin of the eastern United States of America.

The Mine’s operations are located primarily in Mingo County, West Virginia. The Mine includes a wash plant and rail loading facility located on the freehold land.

The underground and surface mines owned by the Group, the Pond Creek Mine and the Lower Alma Lower Bench Mine, have been dormant since 2014 and 2009 respectively. Following Admission, the Group’s primary objective will be to move the first underground mine into production by the end of Q4 2021 and the Company’s immediate priority will be to deploy part of the net proceeds from the Placing in pursuit of the work programme. The Company may also in the future seek to make further acquisitions of metallurgical coal mines in North America.

Historically Hi-Vol-A and Hi-Vol-B metallurgical coal has been produced from the Mine. Metallurgical coal is a critical input in the steel production process.

The Mine has estimated coal resources of 17.2 million in-place tons and proven and probable recoverable coal reserves of 2.34 million tons (comprising the coal reserves at the Lower Alma and Pond Creek mines).

The Mine also has direct access to domestic markets through the Norfolk Southern Rail Company’s rail network and to export markets through the Lamberts Point Export Terminal in Norfolk, Virginia.

The net funds raised on Admission of c. £5.8 million will be used to finance the Group’s mining operations, including: i) the refurbishment of the coal preparation plant and railroad; ii) infrastructure repair iii) the acquisition of mining equipment; iv) working capital; and v) to repay certain short-term debt facilities totalling £2.05 million, which have been used to continue the capital expenditure, owed to MBU Capital Group Limited, the Company’s major shareholder.

Adam Wilson, Chief Executive Officer of Bens Creek, commented: “High quality metallurgical coal is a scarce commodity with large scale mineable deposits limited to regions in the Eastern United States, Western Canada, Eastern Australia, Russia, China, Mozambique, and Mongolia. Importantly, it is also a critical input in the steel production process. This is one of the reasons why the price of metallurgical coal has historically been significantly higher than for that of thermal coal. Metallurgical coal is a daily priced, homogenous, and easily tradable commodity. We have proven reserves with logistical advantages and operational infrastructure in place.

“Upon Admission we expect the business to have low levels of debt combined with robust operating margins, and we expect to generate significant operating cash flows from our operations by utilising contract miners who will supply labour, equipment, and materials.

“There are already several active mining contractors in the state of West Virginia, and we intend to commence operations in Q4 2021, which will help to create employment and stimulate the local economy.

“The macro picture currently looks favourable, with strong global demand for steel, not least in the US, where President Biden announced early this year a $2 trillion plan to overhaul and upgrade the nation’s infrastructure, including plans to spend on roads, bridges and other physical improvements.”

Bens Creek Group is being advised by Allenby Capital Limited, who are acting as nominated adviser and joint broker, together with Optiva Securities Limited as joint broker. Clear Capital Markets Limited acted as placing agent for the Company. (www.benscreek.com)