Photo by: Ivanhoe Mines
TORONTO (miningweekly.com) – TSX-listed Ivanhoe Mines on Tuesday announced a C$150-million equity financing to fund development objectives at its two base metals mines in the Democratic Republic of Congo (DRC).
The Africa-focused project developer said that it had entered into an agreement with a syndicate of underwriters led by BMO Capital Markets, CIBC and Macquarie Capital Markets Canada, under which the underwriters have agreed to buy, on a bought deal basis, 83.33-million units, for gross proceeds of C$125-million.
Each unit compromises a ‘class A’ common share and one common share purchase warrant, at a price of C$1.50 a unit.
Each whole warrant would entitle the holder to buy a common share of Ivanhoe at a price of C$1.80 within 18 months following the closing of the offering.
The financing has an overallotment option for up to 15% of the offering total.
The offering is expected to close on June 10, and is subject to the company receiving all necessary regulatory approvals.
Ivanhoe, founded by billionaire mining legend Robert Friedland, would undertake a parallel private placement through which Friedland would buy about C$25-million units on the same terms and conditions as the public offering, including the right to buy more shares should the overallotment option be used.
Last week, Ivanhoe announced that it did not have enough money to meet certain objectives at its two DRC projects, unless it received a significant cash injection before the end of the current quarter.
The project developer said that it had available consolidated working capital of about $149.8-million at the end of March, compared with $201.7-million at December 31, adding that it would focus the bulk of the capital on pushing forward with the bulk-sampling shaft at the Platreef project, in South Africa’s Limpopo province.
The company said it had $145.2-million available to spend on the Platreef project, which would sustain it through to early next year, and $4.6-million for the DRC projects, which is insufficient to start the underground mine-access decline at the 95%-owned Kamoa project and implement an underground drilling programme at the 68%-owned Kipushi project.