Mincor Resources has completed a $60 million placement to fund an exploration ramp-up at its Golden Mile nickel asset and construction of accommodation at the Cassini nickel mine, both in Western Australia.
The oversubscribed placement offered a share price of $1.28, at an 11.1 per cent discount to the last closing price.
The increase to Mincor’s cash reserves – now around $109 million – follows promising exploration results at the company’s Golden Mile asset.
Mincor managing director David Southam said the capital was already being put to use.
“$15 million has been earmarked for exploration, particularly in light of the success we have enjoyed recently with underground drilling at the Golden Mile, where we have two rigs operating, and surface drilling at location one where a diamond rig is operating,” Southam said.
“The additional funding will give us increased optionality to increase exploration at these locations, while also having the ability to fund out other regional exploration efforts.”
A further $15 million will go towards a new, purpose-built Mincor-owned accommodation facility just 10 kilometres from Cassini.
Along with the necessary infrastructure for transport and power, Southam said this development would enable Mincor to become the strong, independent business it knew it could be.
“This is consistent with our view that Cassini will be a long-term operation that requires appropriate long-term infrastructure,” Southam said.
“It will also eliminate the need for us to continue to use a third-party operated camp in Kambalda for Cassini operations, reduce commute times, and provide important health and safety benefits for our workforce – ensuring we can continue to attract the best people to work for us.”
The new accommodation facility for Cassini with replace the need for staff to travel the 70 kilometres to and from Kambalda.
The remaining capital raised through the placement will go into a $30 million revolving credit facility (RCF) provided by BNP Paribas.
“Finally, a further $25 million will be allocated to replacing the current $55 million syndicated project finance facility (SPFF) with the new $30 million revolving credit facility, which delivers a range of benefits for Mincor’s shareholders as outlined above,” Southam said.
“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.”