Photo by: Bloomberg
PERTH (miningweekly.com) – ASX-listed Aurelia Metals has announced a A$140-million funding solution for its Federation metals project, in New South Wales, while also announcing the appointment of a new MD and CEO.
Aurelia on Wednesday told shareholders that the company had secured a A$100-million facility from commodities group Trafigura, consisting of a $24-million loan note advance facility to contribute to the funding to construct the Federation project, and a further A$65-million environmental bond facility to provide rehabilitation bonding.
The facilities would have a four-year term from the date of financial close, with the loan note interest rate set at the secured overnight financing rate + 6%, while the bond facility interest was set at 6%.
In turn, Trafigura would have an offtake agreement starting from January 2024 for 700 000 t of any combination of zinc, lead and copper concentrate produced from the Peak processing plant, and would be granted 120-million warrants over Aurelia shares with an exercise price of 25c each and a four-year term.
Aurelia said on Wednesday that a portion of the funds would be used to repay the company’s existing A$9-million term loan, while the bond facility would replace the existing A$57-million guarantee facility, releasing A$46-million of restricted cash.
In addition to the Trafigura facilities, Aurelia will also undertake a fully underwritten equity raising of A$40-million through an institutional placement and a 1-for-3.71 pro-rata, accelerated non-renounceable entitlement offer.
Some A$10-million will be raised under the share placement, which will see 112-million new shares issued at a price of 9c each, representing a 21.7% discount to Aurelia’s last closing price.
The placement shares represent 9.1% of Aurelia’s existing issued capital.
The entitlement offer is expected to raise a further A$30-million, and will consist of an institutional entitlement offer and a retail entitlement offer.
Aurelia in March this year received development consent from the New South Wales Department of Planning and Environment to develop the Federation mine. The company earlier this year also updated the feasibility study for the project, finding that it would require a capital investment of A$108-million to support the production of 313 000 t of zinc, 182 000 t of lead, 98 000 oz of gold and 535 000 oz of silver over a mine life of an initial eight years.
The updated study estimates a pre-tax net present value of A$186-million and an internal rate of return of 37%, with a pay-back period of just over three years.
Meanwhile, Aurelia on Wednesday also announced the appointment of Bryan Quinn as MD and CEO, starting on June 6.
Quinn joins Aurelia from copper miner Oz Minerals, where he led the growth, strategy, exploration, sales and marketing business over the last 12 months. Prior to that, he spent more than 27 years with mining major BHP where he held a number of senior executive, operational and business improvement roles.
“Quinn’s extensive experience in business improvement, operational excellence and project delivery is an ideal background to help Aurelia deliver on its exciting development pathway for Federation and Great Cobar, whilst optimising value and performance of our existing assets,” said Aurelia chairperson Peter Botten.
“With the refreshed management team and a competitive and flexible financing package now in place, Aurelia is well positioned to deliver on its value-adding growth trajectory. This represents a pivot point for the company, and we look forward to providing our shareholders with reliable value enhancement.”