PERTH (miningweekly.com) – ASX-listed Mincor Resources will raise A$60-million through a share placement and a share purchase plan (SPP) to fund exploration at its Kambalda projects, in Western Australia.

Mincor on Thursday announced that it would raise up to A$50-million through a two-tranche fully underwritten share placement, priced at 72c each.

The first tranche will consist of more than 24-million shares, to raise A$17.3-million under the company’s existing placement capacity, while the second tranche placement, of more than 45.4-million shares, will be subject to shareholder approval.

In addition, Mincor will also undertake an SPP to raise an additional A$10-million, allowing shareholders to subscribe for up to A$15 000 worth of new shares, also priced at 72c a share.

The issue price represented a 12.2% discount to Mincor’s closing price on June 23, and a discount of 4.6% to the company’s five-day volume weighted average share price.

Existing shareholder Independence Group has committed to subscribe for A$13-million worth of new shares under the placement offer, increasing its shareholding in Mincor to around 8%.

“This capital raising marks another important milestone in our journey to resume profitable and sustainable nickel sulphide mining in Kambalda,” said MD David Southam.

“It caps what has been an exceptionally busy and productive first half for Mincor, notwithstanding the impacts of the Covid-19 pandemic. The past nine months has seen us complete an outstanding high-quality definitive feasibility study, deliver four consecutive mineral resource upgrades and a maiden ore reserve at Cassini, while also securing all key final approvals, executing a mining contract and completing early surface works at Cassini.

“The successful completion of this capital raising will allow Mincor to maintain and even increase this momentum in the second half of this year, putting us in an enviable position with full optionality and flexibility around a final investment decision.”

Southam said that the funding would give Mincor the confidence to complete resource extension drilling during the development timeline at Cassini Main, and to test the Durkin North to Long space from underground positions.

Furthermore, the company’s regional exploration programme can continue at Cassini North, Bluebush, Juno and other targets, he added.

Mincor on Thursday announced a 16% increase in the mineral resource estimate at Cassini, which now stood at 58 700 t of nickel. This was the fourth successive increase since a maiden resource was announced in August 2018.

Southam said on Wednesday that Mincor was planning to mandate a bank or resource finance specialist in the September quarter to provide the debt component of the funding package.

“”This raising has the dual benefit of providing potential debt providers with confidence while also giving Mincor a very strong foundation from which to negotiate.

“Importantly, our nickel restart strategy now has contingency and an additional buffer for any unforeseen circumstances. That flexibility is critical for mining companies during construction and development as emphasised by the recent Covid-19 pandemic.”