PERTH (miningweekly.com) – Bauxite developer Metro Mining suspended share trading on Monday, as the company announced yet another capital raise.
Metro was hoping to raise A$38-million through a two-tranche share placement, to fully fund the construction and development of its Bauxite Hills mine, in Queensland.
The company recently secured A$40-million debt financing from Sprott Private Resources Lending and Ingatatus, which would be used to assist in funding the development of the Bauxite Hills mine.
Metro said on Monday that the first tranche will raise some A$33.9-million and will consist of 251-million new shares, which will be issued under the company’s existing placement capacity.
The second trance of 30.5-million shares is expected to raise a further A$4.1-million, and will be subject to shareholder approval.
The placement will be priced at 13.5c a share, representing a 10% discount to Metro’s last closing price, and a 9.8% discount to the company’s five-day volume weighted average price.
The proceeds from the raising will be used to fund capital expenditure for the Bauxite Hills mine, as well as to provide financial assurance and environmental costs, pre-production costs, financing costs, the purchase of haulage equipment and working capital.
Construction on the A$35.8-million Bauxite Hills mine will start in the second half of this year, with first production scheduled for April next year. The project is expected to produce at an initial rate of two-million tonnes a year ramping up to six-million tonnes a year in the fourth year of operation, with expansion capital estimated at around A$36.7-million.
The Bauxite Hills mine is expected to have a mine life of some 17 years, and will employ around 185 personnel.