The IPO aimed to raise $21 million at 60c per share but strong demand allowed the company to issue another 5 million shares to take the raising to $24 million.
With its shares to debut on Tuesday, the additional $3 million raised will help fund further acquisition and consolidation of the company’s coal licences in the Galshar Basin of eastern Mongolia.
Xanadu also plans to use the extra proceeds to advance coal, copper and gold exploration in the South Gobi region.
Southern Cross Equities corporate executive Haydn Lynch said a wide range of private and institutional investors participated in the IPO.
“Xanadu’s unique combination of coal and copper gold projects, located in close proximity to Mongolia’s key export infrastructure, resulted in the IPO being over-subscribed, which bodes well for the company’s future,” he said.
Existing shareholders include Straits Asia and the Talbot Group, and the float is expected to give Xanadu a market capitalisation of $90-100 million.
The private company started exploring Mongolia six years ago with a focus on projects located close to rail infrastructure and the Chinese border.
The Khar Tarvaga thermal coal project in central Mongolia hosts 327 million tonnes of indicated and inferred resources, and is about 30 kilometres from the Trans Mongolian railway and 160km south of the nation’s capital, Ulaanbaatar.
Xanadu fully acquired the Galshar thermal coal project in June and has set an exploration target of 175-225Mt.
Located in the Southeast Gobi, low ash and sulfur seams up to 21 metres thick were identified back in 1975.
A drilling program is on the cards for 2011. The project is about 65km east of the nearest Trans Mongolian railway spur at a fluorspar mine in Bor-Ondur.
Xanadu’s Hutag Uul copper project and Elgen-Zos gold project are in the same province.
Drilling is underway at Elgen-Zos as part of Xanadu’s commitments to earn an 80% stake of the project.
The best intersection so far is 19m at 0.6 grams per tonne gold starting from a depth of 165m. A rock sample has also returned 0.51gpt gold.
Mongolian coal explorer Hunnu Coal won IPO of the Year at the recent RESOURCESTOCKS Best of the Best awards.
In addition, Vancouver-based SouthGobi Energy Resources acquired a 19.9% stake in Australia-listed Mongolian coal explorer Aspire Mining for $20.1 million in October.
