Paringa Resources (PNL) has raised $30.2m to fill a funding gap for the development of the Poplar Grove coal mine in Kentucky, US. Additional capex was required for a changed approach to coal seam access, weather related delays and a minimum cash balance for debt drawdown. The Company will now be fully funded to initial cashflows in 2019. While this was an unforeseen dilutive event, PNL still offers a compelling discount to our target price with near term coal production, contracted sales from 2018-2022 and strong market dynamics. Argonaut maintains a BUY recommendation with a revised target price of $0.80 (previously $1.50).
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