- Mincor Resources (MCR) plans $65 million capital raise to strengthen balance sheet ahead of production at its WA-based Kambalda nickel operations
- The company has received firm commitments from investors for a $60 million placement of new fully paid ordinary shares at an issue price of $1.28
- Additionally, a share purchase plan will seek to raise a further $5 million, with eligible shareholders offered shares at the same price as the placement
- The funds will go towards an accommodation camp, ramp-up exploration, and replace a syndicated project finance facility with a revolving credit facility
- Shares have been trading 9.03 per cent lower at $1.31
Mincor Resources (MCR) is planning a $65 million capital raise to strengthen its balance sheet ahead of production at the Kambalda nickel operations in Western Australia.
The company has received firm commitments from investors for a $60 million placement of 46,875,000 new fully paid ordinary shares at an issue price of $1.28.
Prior to launch, a Global Natural Resource Fund committed to a minimum $30 million cornerstone investment.
The placement was also well supported by existing shareholders while a number of new, high quality institutions will also come onto the company’s share register.
Additionally, the company will undertake a share purchase plan to raise another $5 million, with eligible shareholders offered shares at the same price as the placement.
MCR will use the money to build an accommodation camp to service its Cassini operations as well as ramp-up exploration activity, while maintaining funding for its regional exploration program through to December 2022, after nickel concentrate production has commenced.
Specifically, $15 million is set aside for the camp which MCR said will reduce commute times between Kambalda and Cassini, and provide important health and safety benefits for the workforce.
It’s also planning to replace its existing $55 million syndicated project finance facility (SPFF) with a simpler, corporate-style $30 million revolving credit facility (RCF) provided by BNP Paribas.
This new facility is said to have fewer conditions and covenants compared to the SPFF, which Mincor said will provide greater balance sheet flexibility and a reduced debt structure during the production ramp-up.
The money is also set to provide general working capital and cover the costs of the capital raising.
Mincor’s Managing Director, David Southam, said this is an important capital raising as the company begins the final countdown to production at Kambalda.
He said the money is allowing the company to implement some key measures to enhance operations and put the business in the best position for future growth.
“We believe it is almost unprecedented for a company going through project development to be able to secure a flexible debt arrangement which is more akin to a mature production company.”
“The RCF not only provides savings and efficiency, but a covenant-light capital
management structure which can be utilised to assist running our business into the long term.”
“Following this capital raising, Mincor is in pole position – not just for the start of nickel production at Kambalda, but more broadly to participate in the fast-growing supply chain for class-1 nickel, which is the ultimate ‘futurefacing’ commodity, poised to play a key role in the rapidly unfolding clean energy revolution.”
Shares were trading 9.03 per cent lower at $1.31 at 1:47 pm AEST.