MANTLE Mining's plan to export Victorian brown coal to India could be a casualty of the volatility of global markets, with a key backer warning it has grounds to terminate its financial support.
Just weeks after reducing the scale of its equity raising from $2.9 million to $1.5 million, Mantle's plan to export refined coal from Bacchus Marsh hit another hurdle this week when Intersuisse revealed it was no longer legally bound to underwrite the raising.
The equity raising - which Intersuisse has underwritten to the tune of $1.5 million - was planned to fund several of Mantle's projects, including the Bacchus Marsh joint venture with coal beneficiation firm Exergen. But the agreement with Intersuisse contained several exit clauses relating to market conditions; at least one of which was triggered this week. Intersuisse informed Mantle of the triggers on Wednesday, and told BusinessDay it was leaving its options open.
Advertisement: Story continues below ''With the indices down over the last week it has triggered the clause where we can pull out. But at this stage we haven't decided to cancel, but we reserve our right to,'' said David Pryles, corporate finance manager for Intersuisse's local associate PhillipCapital.
''It would be remiss of us to cancel and be hasty because as we've seen the markets can sway quite a bit. We've got to make that decision when the time is right in the best interests of our sub-underwriters.''
Mr Pryles said Intersuisse remained a ''firm believer'' in Mantle's plan to beneficiate and export brown coal, and hoped for an ''uplift'' in market conditions between now and the offer's closure on September 2.
Mantle's company secretary, Winton Willesee, said it was ''a positive sign'' that Intersuisse had not terminated the agreement despite having legal grounds to do so. The market was less optimistic, with a drop of more than 8 per cent - 0.8? - pushing Mantle's share price down to its its lowest value of the year at 8.5?.
MNM Price at posting:
8.3¢ Sentiment: LT Buy Disclosure: Held
