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PERTH (miningweekly.com) – Mineral sands miner Strandline Resources has launched a A$35-million capital raise to support the ramp-up of its Coburn project, in Western Australia, towards steady-state production.
The company on Monday launched an institutional placement consisting of 166.7-million shares, at a price of 18c each, to raise an initial A$30-million. The placement price represented an 18.2% discount to Strandline’s last closing price on July 27, and a 17.8% discount to the company’s five-day volume weighted average share price.
The placement will be undertaken in a single tranche under Strandline’s existing placement capacity.
In addition to the share placement, the company will also undertake a share purchase plan (SPP), offering eligible shareholders the opportunity to subscribe for up to A$30 000 of additional shares in the company, also at a price of 18c each.
The SPP is aimed at raising a further A$5-million, and will open on August 7 and close on August 21.
“The offer marks another key step towards delivering on the company’s goal of creating a globally significant critical minerals business. The placement strengthens the company’s balance sheet and places it in a strong position to complete ramp-up at Coburn to steady-state production, including the processing of heavy mineral concentrate (HMC) into final saleable products via the mineral separation plant (MSP),” said Strandline MD Luke Graham.
“Additionally, the placement ensures the company is well-capitalised to accelerate its various growth ambitions, including a scoping study evaluating the potential expansion of Coburn to more than 320 000 t/y HMC production which is targeted to be released later this year.”
Graham said that the placement demonstrated support for Coburn as a world-class project and provided a strong endorsement of the significant work undertaken by Strandline to de-risk its development.
“The company has plans in place to improve equipment and plant availability, enhance mine and tails deposition planning and increase mineral recoveries, all of which are expected to fast-track ramp-up in the September 2023 quarter and the company looks forward to delivering this.”
Graham on Monday told shareholders that commissioning and ramp-up of the Coburn project continued during the quarter ended June, with regular shipments of HMC product and steady cashflow generation.
“Some commissioning issues were encountered, and measures are being implemented to overcome these. The company has rectified many of these issues and is confident that production rates will rise towards nameplate performance levels as commissioning progresses.”
Total HMC production for the quarter ended June was 26 134 t, down slightly from the 29 855 t produced in the March quarter.
During the quarter ended June, the company completed its sixth shipment of HMC and exported a total of 57 000 t of HMC since commencing production. Shipments of HMC to the end of the quarter generated total revenue of around A$60-million, providing working capital as Strandline continues to ramp up operations at Coburn.
Subsequent to quarter end, Strandline completed a seventh shipment of HMC of 7 800 t, valued at around A$9.1-million CIF. This shipment was scheduled for June 2023 but was delayed by the shipping carrier for reasons outside of Strandline’s control.
“Strandline has strong growth project optionality and made positive progress during the quarter on key government approvals and land access compensation arrangements at the Tajiri and Fungoni projects respectively, while also studying the potential to increase Coburn’s throughput by up to 50%, which would enable us to leverage existing infrastructure and grow cash flow significantly,” said Graham.