Underground coal gas specialist Wildhorse Energy (ASX:WHE, LON:WHE) has raised a further US$1.4 million through the sale of its Sweetwater uranium project in Wyoming USA.
The proceeds of the disposal will be used to fund a bankable feasibility study for its flagship underground gas project at Mecsek Hills, Hungary.
The money from the disposal will add to the US$5.56 million raised through a placing at 5p that was completed last week.
Matt Swinney, Wildhorse’s managing director said, "The sale of these ancillary uranium assets is highly positive for the company and enables us to augment our cash position following the successful completion of the pre-feasibility study at our primary Mecsek Hills UCG Project.
Although these US assets are prospective, we are focussed on developing our European energy portfolio, comprised of UCG and uranium assets, which provide us with exposure to the compelling regional gas dynamics.”
Under the terms of the deal, the buyer, which is an unnamed mining company, also has a 120 day option to purchase Wildhorse’s Bison Basin uranium project in Wyoming for US$100,000.
The Sweetwater and Bison Basin assets had a book value at the end 2011 of about US$1.5 million.
Wildhorse’s plan is to use underground coal gasification (UCG) technology to convert stranded coal into syngas, which it will sell to power stations as a gas feedstock.
While it is initially focused on Hungary, the group intends to buy sites across central and eastern Europe and become a major gas feedstock supplier to power stations in the region.