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- Junior zinc miner Consolidated Zinc (CZL) has entered a trading halt today as it irons out the details of an upcoming capital raise
- This will be the third capital raise launched by Consolidated Zinc in the last six months
- The company said in late-July it was not anticipating the need to raise any extra cash soon, but it seems it has changed its mind
- The company has not yet revealed how much it plans to raise and at what price, nor for what the funds will be used
- Shares in Consolidated Zinc last traded for 0.5 cents each on Friday afternoon
Junior zinc miner Consolidated Zinc (CZL) has entered a trading halt today as it irons out the details of an upcoming capital raise.
The company has not yet revealed how much it plans to raise and at what price, but shares are expected to break out of their trading halt on Wednesday, September 16.
Of course, the upcoming raise may come as no surprise to shareholders given CZL’s cash position at the end of the June quarter.
Consolidated Zinc went cashflow-negative by US$540,000 (around A$740,000) over the June quarter and had US$745,000 (around A$1.02 million) in the bank at the end of June.
However, the onset of COVID-19 put CZL in the firing line of government shutdowns in Mexico, which is the home of the company’s flagship Plomosas Mine. Due to the coronavirus, Consolidated Zinc’s production was shut down for 76 out of the 91 days in the June quarter.
With this in mind, as well as the rising prices of zinc and lead compared to the first half of the year, Consolidated Zinc said at the end of July it was anticipating improved operating cash flows for the rest of the year and as such would not need to raise new funds any time soon.
Alas, it seems the company has changed its mind. The upcoming capital raise will be the third raise launched in the past half-year: Consolidated Zinc raised just over $1.7 million in April through an entitlement offer and another $570,000 in June through a share placement.
Shares in Consolidated Zinc last traded for 0.5 cents each on Friday afternoon.
