Pan Asia to raise $5m fund to develop Indonesian projects

ASX-listed coal firm Pan Asia Corporation will raise a total fund of AUD 5 million through the ASX with Cedrus Investments Ltd. as its lead manager, the Company said on Wednesday.

But the company said that the plan is subject to shareholder approval.The fund will be raised through a placement of 175 million fully paid ordinary shares at 2.85 cents per share and one free 2 year unlisted option per share, each exercisable at 4.5 cents, it said.

The additional funds will enable the Company to continue the development of new projects in Indonesia and in conducting exploration activities with regards to additional Indonesian projects.

In November 2009, Pan Asia Corporation entered into an agreement with Innovation West Pty Ltd (WI) to acquire up to sixteen new coal concessions and six new manganese concessions in Indonesia.

Of the sixteen coal assets acquired, thirteen are in East Kalimantan; one in Central Kalimantan and two in Sumatra. These coal interests comprise of four exploitation permits, nine exploration permits and three applications. In total these permits cover more than 80,000 hectares of high potential coal interests.

These coal projects are in addition to the TCM coal project (75% interest) it already had in South Kalimantan.

The Company recently signed a Memorandum of Understanding with the contracting company responsible for mining at a second open pit in the adjacent of PT Arutmin ATA's concession. This MOU covers the planned expansion of the main ATA open pit mine into the TCM concession on a profit share basis with the Company being carried for capital and operating costs.(denny)