Leigh Creek Energy (ASX:LCK) is well positioned to develop its Leigh Creek Energy Project (LCEP) in South Australia, after getting commitments to raise $21.85 million.
Hong Kong based China New Energy will acquire 136.3 million Leigh Creek shares in three tranches at $0.147 per share, raising $20 million.
Leigh Creek has placed a further 13.7 million shares at $0.135 each with sophisticated and professional investors to raise $1.85 million.
The LCEP will produce syngas, electricity and fertiliser from the remnant coal resources at Leigh Creek mine site, utilising In Situ Gasification (ISG) technology.
Syngas, or synthesis gas, is a fuel gas mixture consisting of hydrogen, carbon monoxide, and methane.
The investment by China New Energy underpins the financial viability of the project, representing a significant positive step in the development of the Leigh Creek Energy Project.
Importantly, post capital raising, Leigh Creek will be fully funded through to completion of its pre-commercial ISG demonstration facility, scheduled for Q4 2017.
Leigh Creek’s primary focus is to provide reliable electricity supply to major energy consumers in South Australia and the metropolitan demand centre in Adelaide.
The company had completed a successful scoping study in January 2017, based on the inferred JORC resource of 2,964 petajoules (PJ) of syngas at LCEP.