JOHANNESBURG (miningweekly.com) – Diversified junior Metals X has completed an institutional placement to raise A$100.6-million – and is undertaking a share purchase plan of up to A$15-million – to fast-track the development of additional production from several of the company’s projects in both the gold and base metals divisions.

The placement is for the issue of about 68-million new Metals X fully paid ordinary shares at an issue price of A$1.48 a share, representing about 12.9% of the fully diluted shares that the company has on issue.

The ASX-listed metals miner noted that the placement would provide it with additional working capital, enabling it to pursue additional value-add.

Metals X also intends to demerge its gold assets from the rest of its diversified metals base and is, therefore, taking steps to gain shareholder and other regulatory approvals in this regard.

Following several acquisitions made in recent years, including the completion of a takeover offer for Aditya Birla Minerals, which owns and operates the Nifty copper mine, in Western Australia, the company believes that its base metals division – which was significantly bolstered from this most recent acquisition – can stand alone “as a formidable diversified base metals company, with production from its tin and copper assets, and expansion and growth assets in tin, copper and nickel”.

“Given prevailing economic and market conditions, the board of Metals X believes the time is now right, and its shareholders are better served, if the company looks to separate its gold division from the remainder of the diversified base metal assets,” said the company.

The intent is that, following the completion of the separation of a gold unit, a Metals X shareholder will own equal interests in shares in both entities. Cash and working capital will also be split, so that the two new companies will have adequate funding for their operations and respective growth plans.

Metals X CEO and executive director Peter Cook highlighted this as “an exciting time” for shareholders and an opportunity for the company to unlock “the considerable value” under the Metals X umbrella.

“Following the equity raising and demerger process, our shareholders will own shares in two formidable mining companies with great opportunity and outlook to grow and prosper,” said Cook.

Cook will likely become the MD of the gold business unit, while Metals X’s other executive director, Warren Hallam, will become the MD of the base metals business.

Metals X has three operating gold projects, four process plants with a combined capacity of 5.5-million tons a year, a gold resource base of 15.4-million ounces and ore reserves of 2.89-million ounces.

It currently produces at a run-rate of 220 000 oz/y and has a clear plan to double this over the next few years.