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Cuesta Coal Limited (ASX:CQC) Raises $12 Million at 18cents to Accelerate Development

Sydney, Australia, Feb 22, 2013 - (ABN Newswire) - Cuesta Coal Limited (ASX:CQC.AX - News) is pleased to announce that it has successfully executed a Share Placement Agreement to raise $12 million by issuing 66,666,667 new ordinary shares at A$0.18 per share to the Company's major shareholder, Longluck Investment (Australia) Pty Ltd, a wholly owned subsidiary of Beijing Guoli Energy Investment Co.

The funds will be used to reduce the Convertible Note liability and to fast-track the Company's priority development project at Moorlands, located 14km west of the Blair Athol Coal Mine in the Western Bowen Basin in Queensland.

Use of Funds

Cuesta will use $5 million to redeem 50% of the $10 million Convertible Notes that will be issued to the vendors upon settlement of the acquisition of the Orion Coal Project which was announced to the market on 12 December 2012. The remaining $7 million will be added to the existing cash reserves of $10.40m (at 31 December 2012) for Cuesta to accelerate development of Moorlands. Details of the 2013 development program will be released to the market in the near future.

Terms of the Share Placement Agreement

Under the terms of the agreement the following are key terms and conditions:

- $12 million raised at a share price $0.18 to issue 66,666,667 new ordinary shares.
- $5 million to redeem Convertible Notes.
- $7 million to be added to working capital.
- Completion date is on or before 31 July 2013.
- The placement is subject to Chinese Regulatory, FIRB and Shareholder approval.
- Cuesta Coal is required to obtain an Independent Expert's Report
- Under the terms of the agreement Beijing Guoli will be entitled to nominate an additional Director to the Cuesta Coal Board

About the Moorlands Project

On the 10th December 2012 Cuesta announced a resource upgrade to 53.4Mt on its EPC 1738 and on the 12th December 2012 Cuesta announced the acquisition of the Orion Coal Project (EPCs 775 and 776) from Hannigan & Associates. The Orion Coal Project is situated to the immediate north and a continuation of Cuesta's existing resource in EPC 1738, located 14km from the Blair Athol Mine. Together the deposits are called the Moorlands Project.

The Moorlands Project contains a combined resource of 136.3Mt and an exploration target of 85-150Mt as announced by the Company on the 12th of December 2012.

Cuesta has engaged mining consultants Xenith to conduct a mine scoping study on the Moorlands Project and is finalising its development activities for 2013.

Moorlands provides the Company with a significant development project opportunity and the funding agreement announced today with Beijing Guoli allows Cuesta to achieve its development objectives.

About Beijing Guoli

Beijing Guoli is a Limited Liability Company, registered with The Beijing Administration of Industry and Commerce in 1993. Beijing Guoli is based in China, their investments include:

- Electrical Generation
- Coal Mining
- Financial Investment
- Chemicals
- Real Estate Development

Cuesta Coal's Managing Director Mr Matthew Crawford commented: "This funding is a significant vote of confidence by our major shareholder. Beijing Guoli recognises the potential of Moorlands and have indicated that they will continue to support our growth. This takes Guoli's total investment in Cuesta to $32 million.

"Our immediate priority is to complete the mine scoping study at Moorlands in Q1 2013 followed by resource drilling programs in the lead up to feasibility studies.

"We now have a significant amount of working capital to fund the Company's ongoing activities and remain focussed on maximising shareholder value.

Mr. Ruoshui Wang, who represents Beijing Guoli on the Cuesta Coal Board, added: "Beijing Guoli is pleased to continue supporting Cuesta's growth and development. The Moorlands Deposit has significant unlocked value, and this capital raising will help to fund a broad range of development activities this year.

"We are very pleased with Company's progress and look forward to supporting its ongoing growth."

About Cuesta Coal Limited:

Cuesta Coal Limited (ASX:CQC.AX - News) listed on the Australian Stock Exchange on the 4th of May 2012 raising $20 million to find an aggressive 2 year exploration, mine scoping and feasibility study program on four key project areas in the Queensland Coal Basins.

Cuesta has assembled a diverse portfolio of thermal and coking coal exploration prospects within the Bowen, Surat and Galilee basins, the company's core projects are well situated geographically with over 11,000km2 of exploration ground in total.

Cuesta's balanced portfolio consists of a pipeline of projects ranging from advanced exploration requiring resource definition drilling, to conceptual opportunities requiring scout drilling. The projects are located in close proximity to current and future planned infrastructure.


Cuesta Coal Limited T: +61-2-9284-5900 F: +61-2-9284-5999 E: WWW:


Cuesta Coal Limited

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