Fully capitalised for pre-commercial demo

On 31 March 2017, Leigh Creek Energy (LCK) announced that it had raised A$21.85m of new equity; net proceeds are to be used to fund the company’s pre-commercial ISG demonstration project. A new cornerstone investor has also been added to LCK’s shareholder register, China New Energy, a Hong Kong-based company with a mix of assets in China including steel mills, gas fired power stations and coal mines. Our RENAV falls from $0.31/share to $0.26/share to reflect the equity dilution but importantly, the new funding provides visibility on the upcoming demonstration project which has the potential to significantly de-risk LCK’s flagship project. We continue to risk our valuation with a subjective 20% chance of commercial success – we expect to revise this risking on completion of the demonstration project.