Photo by: Bloomberg
PERTH (miningweekly.com) – Zinc developer New Century Resources was hoping to raise A$40-million through an institutional share placement to fund the restart of the Century mine, in Queensland.
Century will place some 36.3-million new shares, priced at A$1.15 each, to institutional investors. The offer price was a 9.1% discount to Century’s closing price on April 27, and an 8.5% discount to the five-day volume weighted average price of the company’s shares.
The shares up for offer will represent around 7.2% of the company’s undiluted share capital.
Century told shareholders on Monday that the proceeds from the capital raise would fund the A$62.5-million restart of the Century zinc mine, and would allow the company to pursue its strategy of becoming a leading listed Australian zinc producer.
The restart of the Century mine is on track, with first production expected in the third quarter of this year, at an initial processing rate of eight-million tonnes a year.
Once in production, New Century will invest a further A$63-million over a 15-month period to ramp up production and bring the operation to its full production capacity of 15-million tonnes a year.
New Century has previously secured a $45-million senior, secured debt facility from Sprott Resources Lending, subject to due diligence and legal documentation.
However, the company decided not to proceed with the Spott facility after securing a $15-million unsecured working capital facility associated with zinc concentrate offtake from MRI Trading.
New Century told shareholders that this decision provided the company with grater financial flexibility, given the restrictions on timing of the use of the funds, as well as other encumbrances required as part of a senior, secure debt facility with Sprott.
In addition, base metals producer MMG also continued to support New Century, and was providing a total of A$46.6-million in payments to support the funding of ongoing rehabilitation obligations, certain care and maintenance activities and meeting the Century mine’s existing stakeholder payment obligations.