Miner Hargreaves in bid to raise £42m through a share placing

The group said the new shares will be priced at 775p and will only be available to institutional investors. Members of the public won’t be eligible to take part in the placing.

The cash will be used to accelerate the development and expansion of Hargreaves’ portfolio of UK surface mining assets.

The group is looking to acquire key surface mining assets as the sector undergoes a major restructuring.

The company is already in talks over mine assets that have a current annual production of between one and two million tonnes.

“The board’s view is that further attractive acquisition opportunities are likely to emerge in the near term,” the group said.

The company expects that its new investments will be earnings enhancing in the 2014 financial year.

Corporate lawyers from Walker Morris advised Hargreaves on its placing.

N+1 Singer Advisory and Jefferies International Limited were joint bookrunners and bro- kers.

Maltby Colliery, near Rotherham, closed down earlier this year after more than 100 years of mining.

Hargreaves announced last year that the colliery was no longer economical and would be mothballed with the loss of more than 500 jobs.

Its closure leaves Kellingley Colliery in North Yorkshire and Hatfield Colliery near Doncaster as the region’s last remaining deep mines. Hargreaves made hefty losses from the closure of Maltby.

The costs of mothballing, redundancies and asset write-offs were estimated at £65m.

Combined with a £10.4m operating loss but offset by £18.1m tax gains, Hargreaves expected to make a £57.3m pre-tax loss.