Mincor Resources NL (ASX: MCR, 'Mincor' or 'the Company') is pleased to announce a successful placement of $30.0 million (before costs) to strategic investors, institutions and other sophisticated and professional investors ('Placement').
In addition, a Share Purchase Plan ('SPP') targeting to raise $5.0 million will also be offered to eligible shareholders on the same terms as the Placement. The SPP will be closed as soon as $5.0 million of applications are received. If demand exceeds this amount, oversubscriptions will be accepted or scaled back at the Directors' discretion.
Existing strategic shareholders, IGO and Squadron committed $2.0 million and $7.2 million respectively, being in excess of their pre-existing pro-rata shareholding in Mincor and will at completion of the Placement hold interests of 4.41% and 6.17% in Mincor respectively.
The capital raising is being undertaken to: Fund early pre-production capital costs associated with Mincor's Nickel Restart Strategy. Proceeds will allow Mincor to commence early capital works at Cassini and Long-Durkin ahead of the expected completion of the DFS in Q1 CY2020. These include pre-development activities at Cassini (clearing, box-cut and decline) and underground development at Long-Durkin; Maintain the current level of momentum with the Company's exploration and resource growth programs. As part of Mincor's strategy to build a pipeline of development projects, Mincor has budgeted approximately $8.0 million for nickel exploration in CY2020, split between brownfields resource expansion projects and emerging greenfields opportunities; Further strengthen Mincor's balance sheet, increasing its forecasted cash position to approximately $55 million by 31 December 2019. The Company believes that this strong financial position will assist it in negotiating a competitive project financing package upon completion of the DFS and Fund general corporate and working capital purposes and to meet the costs associated with the Placement and SPP.
This capital raising follows Mincor achieving several recent milestones including: 1. Some of the best massive nickel sulphide intersections from the Cassini deposit reported in September and October 2019; 2. A further Mineral Resource upgrade at Cassini in early November 2019 to 1.254Mt @ 4.0% Ni for 50,400 nickel tonnes, following the completion of just six diamond drill holes subsequent to the previous Mineral Resource update in August 2019; 3. The execution of an Ore Tolling and Concentrate Purchasing Agreement with BHP Nickel West on substantially improved commercial terms for Mincor; 4. Significant progress with the Nickel Restart Strategy DFS, which is on track for completion next quarter and 5. The appointment of Orimco Pty Ltd ('Orimco') as the Company's Debt Adviser and the commencement of discussions with several local and international financial institutions. Orimco has recently successfully advised a number of resource companies in securing competitive project financing packages.
Commenting on the capital raising, Mincor's Managing Director, David Southam, said: 'This highly successful capital raising marks another important milestone in our journey to resume profitable and sustainable nickel sulphide mining in Kambalda.
'The commitment of existing institutional and sophisticated shareholders shows that our recent success with Cassini and other milestones have gained traction with investors. I would also like to acknowledge both IGO and Squadron for their continued ongoing support of the Company through their strong participation in the capital raising.
'The capital raising effectively puts us ahead of the curve in terms of the normal evolution of a resource developer as we progress from DFS through to production. With a significantly strengthened balance sheet, we will have the capacity to commit to important items of pre-production capital expenditure before we complete the DFS. Some of these items are detailed in the presentation that accompanies this announcement, and include the construction of a box-cut, site infrastructure and the commencement of the decline at Cassini.
'We will also be in a much stronger position to negotiate a competitive project funding package and expect to be in a position to move seamlessly from DFS completion through to a formal decision to mine without delay, allowing us to capitalise as quickly as possible on the strong nickel market environment.
'We are also mindful that, while we rule-off our mining inventory to complete the DFS next quarter, we are confident that our portfolio of opportunities has the potential to yield a lot more. As an example, the Cassini Mineral Resource currently has 50,400 contained nickel tonnes, however the funding from this capital raising will allow us to maintain a disciplined exploration spend with the aim of increasing this Mineral Resource while testing nearby and adjacent targets.1 Mincor is planning to be in operation for many years and this important upfront investment in our project pipeline will help us to achieve that objective, creating a platform to continue growing our Ore Reserves well into the future.'
Placement
The Company has received binding commitments for a $30.0 million Placement (before costs) which will be settled through the proposed issue of 50,000,000 fully paid ordinary shares (Shares) at an issue price of $0.60 per Share. The Placement, which was extremely well supported, was undertaken utilising the Company's existing ASX Listing Rule 7.1 and 7.1A placement capacity. 21,325,932 Shares will be issued pursuant to ASX Listing Rule 7.1 and 28,674,068 Shares will be issued pursuant to ASX Listing Rule 7.1A (Placement Shares).
The issue price represents a 7.7% discount to the closing price on 18 November 2019 and a discount of 10.7% to the volume weighted average market price (VWAP) of Shares over the last five trading days. Euroz Securities Limited and Petra Capital acted as Joint Lead Managers to the Placement. Gilbert + Tobin were legal advisers to the offer. The Company expects to issue the Placement Shares on or around 27 November 2019.
SPP
The Company applied for an ASX Waiver to the ASX Listing Rules to allow it to launch an SPP to enable all shareholders to participate in this milestone capital raising. The ASX Waiver was granted on 20 November 2019, allowing the SPP to proceed.
The Company is targeting to raise $5.0 million (before costs) through the SPP. The SPP will allow all eligible shareholders to subscribe for new Shares at the issue price of $0.60 per Share. The SPP will be closed as soon as $5.0 million of applications are received. If demand exceeds this amount, oversubscriptions will be accepted or scaled back at the Director's discretion.
Participation in the SPP is entirely optional. Shareholders whose registered address is in Australia and New Zealand as at 5.00pm (WST) on the Record Date of 20 November 2019 ('Eligible Shareholders') will be offered the opportunity to subscribe under the SPP for up to $15,000 worth of Shares (subject to any scale back at the Company's absolute discretion) at an issue price of $0.60 per Share. The issue price is free of brokerage and commission.
Contact:
David Southam
Tel: (08) 9476 7200
Email: d.southam@mincor.com.au
MINCOR RESOURCES NL 