MetroCoal, which is 79% owned by Metallica Minerals, has lodged a prospectus with the Australian Securities and Investments Commission for a raising of $8.4-10 million.

The IPO is for 33.6-40 million ordinary fully paid shares in MetroCoal at an issue price of 25c.

Patersons Securities is underwriting the offer to the extent of $8.4 million.

Assuming that MetroCoal raises $10 million, Metallica Minerals will retain 56% of the junior and, based on a listing price of 25c, will add some $20 million to its balance sheet.

Applications in the IPO open November 6 and close November 19.

A listing on the ASX is anticipated for December 4.

MetroCoal holds six coal exploration permits covering more than 4000 square kilometres in the Surat and Ipswich basins. An application for a seventh permit in the Surat Basin was submitted in April this year.

Based on historic drilling programs and its own drilling results, MetroCoal has an exploration target to define 2.5-3.5 billion tonnes within the next two years.

The company has a strong management team with David Barwick as chairman and Andrew Gillies as non-executive director.

Barwick, also chairman of Metallica Minerals, has played a significant role in funding and bringing into production numerous mining projects, and has managed more than 26 public companies in a director’s capacity.

Gillies has been managing director of Metallica Minerals and its subsidiaries since 1997 and is also a director of ASX-listed Cape Alumina, Orion Metals and Planet Metals, as well as being a director of the Queensland Resources Council.

Shares in Metallica Minerals closed down 5% yesterday to 28.5c but bounced back this morning to 30c.