Metminco buys Solomon Islands nickel project, to delist from Aim
Share trading in Metminco resumed on the ASX on Wednesday as the miner announced the acquisition of the Jejevo nickel project, in the Solomon Islands, giving it exposure to the nickel market at a time of rising demand from the battery market.
Metminco will buy Sunshine Metals in a scrip transaction, which will give it 80% of the Jejevo project, on Santa Isabel island, and an 80% interest in an early stage bauxite prospect, the Tausere project, located on the Choiseul island.
The Jejevo project is based on nickel laterite mineralisation, which was previously held by Inco and Sumitomo. The project combines attractive nickel grades, with close proximity to a site believed suitable for barge exports and is potentially suitable for a low capital direct shipping operation (DSO) development.
“Together with our Quinchia gold project, in Colombia, we now have two advanced exploration projects that we believe offer near-term development potential,” said executive chairperson Kevin Wilson.
He stated that Metminco would move quickly to advance Jejevo and announced a $3-million capital raising.
Metminco has received firm commitments for a placement of 135-million shares at 0.4c each to raise $540 000 using the company's available capacity. It will also undertake a prorata renounceable rights issue to raise up to $2.5-million, comprising an offer of three Metminco shares for every five existing shares at issue price of 0.4c a rights share, together with one attaching listed option exercisable at 1.1c a share before June 1, 2020 for every three right shares subscribed under the issue.
The rights issue is intended to be underwritten by Patersons, which is also acting as lead manager to the rights issue, although the extent and terms of such underwriting is yet to be finalised.
Shares in Metminco fell by 20% to 0.4c a share when trading resumed on the Australian bourse on Wednesday.
LONDON DELISTING
Meanwhile, the company announced that it would delist its shares from the Aim, citing limited trading and liquidity on the London Stock Exchange.
For the past 12 months, less than 9% of the trading in Metminco shares has occurred on Aim, with this figure falling to less than 5% since completion of the entitlements issue in April 2018. Low levels of liquidity also carry the risk that the company's share price can move up or down significantly following trades of small numbers of shares. The company has also had limited success in attracting significant funding out of the UK.
“The board believes that the burdens and risks of the company's current admission to trading on Aim outweigh the benefits and that, accordingly, it would be in the best interests of the company and shareholders as a whole if the company's admission to trading on Aim were cancelled.”
The last day of trading on the Aim will be October 16.
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