Duchess Paradise is situated 175km southeast of the remote town of Derby in the state’s Kimberly region.

A definitive feasibility study for the project suggested production potential of 2.5 million tonnes per annum of thermal coal over an initial 10-year mine life.

The share placement entails an issue price of 12c per share represents a 33.3% premium to the last traded price of 9c.

The shares will be issued to ASF Group with an interest in exploration tenements adjoining Duchess Paradise.

Rey Resources managing director Kevin Wilson said the proposed placement was an exciting opportunity for the company.

“The exclusivity agreement with ASF provides a framework for potentially reaching a positive outcome for shareholders in developing Duchess Paradise,” he said.

“ASF is a company that has shown that it has the necessary access to capital to incubate and develop projects successfully.”

Rey specified that the funds raised from the placement would be used to execute coal exploration drilling in the Canning Basin, progress the approvals process for Duchess Paradise and provide for general working capital and corporate purposes.