In a push to amplify nickel production at its Golden Mile Ore Reserve and diamond drilling operation at Cassini, reserves and commodities miner Mincor Resources [ASX:MCR] has launched a capital raising targeted at $60 million.
The capital-boosting event will consist of a fully underwritten placement of $55 million and a non-underwritten share purchase plan (SPP) of an additional $5 million (ahead of associated costs).
Year to date, the miner’s stock hasn’t been at optimal performance, having slipped around 11%.
However, MCR has performed strongly in the last 12 months, increasing by 34%. The company remains high on the market average by 37%.
Source: tradingview.com
Mincor targets $60 million for operational boost
The resources miner has halted trade and is preparing to launch its targeted $60 million capital raising, which it hopes will raise enough funds to accelerate underground development of its Northern Operations.
These operations consist of the company’s Golden Mile development — which it intends to allocate up to $20 million of proceeds towards – and resource definition diamond drilling at its new Cassini Operation — to take another $15 million.
Mincor says that any remaining proceeds will improve its balance sheet and fund the upcoming ramp-up for its Kambalda nickel project throughout the rest of the financial year.
With Golden Mile development originally forecast for mid-2023, the company believes the new funds will fast track drilling and access works so that development of first ore could be achieved by Q4 FY2023.
For Cassini, program commencement was initially forecast for late FY2023. However, all being well, this could push to January 2023.
Source: MCR
Fundraiser pricing and fine print
Mincor’s offer is in two parts. The bulk of the capital raising consists of a fully underwritten placement to certain eligible institutional, sophisticated, and professional investors — and then there’s the non-underwritten share purchase plan (the SPP) open to eligible Mincor shareholders (including retail).
The offer pricing has been slashed at a 14.4% discount to the company’s five-day VWAP (volume-weighted average price) up to yesterday and a 5.1% discount to the company’s 30-day VWAP.
This brings the price to $1.39 a share.
39,568,346 fully paid ordinary shares will be issued under the placement (the $55 million) as new shares. They will be of equal ranking with existing, fully paid ordinary shares from their issue date.
Lead manager and bookrunner, Euroz Hartleys Group, will fully underwrite the placement.
Eligible Shareholders will also be able to apply for up to $30,000 worth of New Shares via the SPP, provided the company does not decide to scale back the offer. These shares will also rank equally with existing shares.
MCR stated:
‘The Company intends to use the balance of raised funds to further strengthen and de-risk the balance sheet over the remainder of the FY2023 ramp-up year, providing sufficient headroom to mitigate unforeseen ramp-up delays and to clear scheduled hedges,’
Nickel hedges put in place in original project financing continue, and as at 30 November, 3,569 tonnes nickel remained under the mandatory hedge program with BNP Paribas, at an average price of between $21–$22,000 a tonne.
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For Money Morning
