https://www.copyright link/content/dam/images/h/0/z/k/5/n/image.related.afrArticleLead.620x350.h14nkp.png/1535506247384.jpg
Gina Rinehart is investing in a Canadian coal play. Supplied
Coal hopeful and former initial public offering candidate Riversdale Resources has found its new equity backer.
Street Talk understands mining magnate Gina Rinehart, Australia's third richest person, has agreed to write a $68.9 million cheque in return for a 19.9 per cent stake in the company.
The investment was made via Rinehart's Hancock Prospecting, which has interests in iron ore, coal, beef, dairy and minerals exploration, and values Riversdale Resources at about $500 million.
The fresh funds are expected to help Riversdale Resources pay for capital equipment and other costs associated with early stage development of its Grassy Mountain hard coking coal project.
Riversdale Resources owns the Grassy Mountain coal project in Canada, which it expects to be a 4.5 million tonnes a year hard coking coal open cut project once it is up and running.
The company is chaired by Michael O'Keeffe and run by Steve Mallyon; the pair that set up Mozambique coal play Riversdale Mining before selling it to Rio Tinto for $US3.7 billion in 2011.
The new investment comes after Riversdale Resources hired boutique stockbroker Aitken Murray Capital Partners to help raise fresh funds and following an unsuccessful run at the ASX-boards.
The raising was done at about the midpoint of the proposed initial public offering.
The company fronted Australian fund managers for sharemarket float via Goldman Sachs and Deutsche Bank earlier this year, before withdrawing its plans.
Fund managers baulked at the fact Riversdale Resources' project was pre final approvals and expect it to consider a return to public markets once the mine is up and running.
Rinehart joins a share register with some well known names in Australia's mining industry and capital markets. Other investors include private equity firm Resources Capital Fund, Macquarie, Mallyon, O'Keeffe, Reliance Worldwide Corporation's former chairman Philip Munz, M&A lawyer Gary Lawler, grazier and financier Kerry Wark and Riversdale CFO Anthony Martin.
(20min delay)