Photo by: Bloomberg
PERTH (miningweekly.com) – The shares of ASX-listed Sirius Resources went into a trading halt on Wednesday as the company announced a A$189-million capital raise.
The nickel developer would place some 49.5-million new ordinary shares, at a price of A$3.82 a share, to eligible institutional and sophisticated investors.
The offer price represented a 6.4% discount to the company’s last traded price, as well as a 3.9% discount to the five-day volume-weighted average price of Sirius shares.
Sirius said in a presentation on Wednesday that the company would not require shareholder approval for the raising, as it fell within its placement capacity.
The funds raised would be used to develop the Nova nickel project, in Western Australia, as well as to fund ongoing exploration activities and for general working purposes.
A recently completed definitive feasibility study (DFS) on the Nova project estimated that it could generate net cash flow of A$2.74-billion from a nickel revenue of some A$4.53-billion, over the project’s ten-year mine life.
C1 cash operating costs after by-product credits were forecast to be A$1.66/lb nickel in concentrate, which was better than the 2013 scoping study estimates.
The DFS slightly increased the expected capital expenditure for the project to A$473-million, up from the A$471-million estimated in the scoping study, with the capital cost now including extra risk mitigating measures.
The DFS was based on a processing rate of 1.5-million tonnes a year, to deliver about 26 000 t/y of nickel, 11 500 t/y of copper and 850 t/y of cobalt over a ten-year mine life.
The approvals and permitting process for the Nova project was currently under way, and project development was expected to start early in 2015, subject to the grant of a mining lease and other approvals.