The company said the money would go towards funding further exploration, conducting prefeasibility studies at the Morupule South project in Botswana (including bulk sampling activities), completing due diligence activities on the Knox project in the USA and for general working capital.

Hodges’ managing director Mark Major said: “Following completion of the share purchase plan we will be fully funded to complete the joint venture earn in at Morupule South and move the project into prefeasibility, as well as complete the necessary due diligence on the Knox projects.”

Hodges entered into a binding heads of agreement last month to acquire 100% of four permitted mining leases and a permitted load-out facility in Kentucky, collectively known as the “Knox project”

The Knox project provides a near-term metallurgical coal production opportunity for the company to balance its overall coal portfolio, which includes a highly prospective but longer-term thermal coal project in Botswana as well as projects in Sweden, Ghana and Australia.

The leases have an exploration target of an estimated 2-3 million tonnes on about 3000 acres.

An additional exploration target of about 10-13Mt over a further 11,700 acres of similar coal leases are under option.

The project’s coal seams are a specialty low-ash metallurgical coal, expected to sell for approximately $225 per tonne in the domestic market.

Eligible shareholders can apply to purchase $3000 to $15,000 of shares at 9 cents each, equating to a 6% discount from the volume weighted average market price of shares sold on the Australian Securities Exchange.

The offer opens on March 15 and will close on April 12.