$6.25m for Metgasco expansion

CASINO-based Metgasco went to the market last week to raise funds to support its expansion plans.

The company raised $6.25 million from existing and new institutional investors through a private placement of new ordinary shares.

In addition, Metgasco is offering eligible shareholders the opportunity to participate in a share placement program, allowing them to apply for up to $15,000 worth of shares valued at 26 cents each.

In an update to the sharemarket on Friday, the Casino company said the funds, in large part, would be used to supply local customers and the first stage of the Richmond Valley Power Station.

The two projects will be Metgasco's first revenue-generating ventures.

The Northern Star reported last Wednesday that the company had signed a memorandum of understanding to supply gas to Richmond Dairies in Casino.

Metgasco chief executive Peter Henderson said the two companies expected the final sale agreement would be completed by the end of the year.

“The MOU is a small but important step in moving the company from its exploration phase to the production phase of its business,” he said last week.

The remaining funds from the capital raising will be spent on the development and drilling of other sites, including the Rosella well at Mackellar North.