KALGOORLIE (miningweekly.com) – Graphite developer Syrah Resources on Monday announced a A$211-million capital raise to fund the development of its Balama project, in Mozambique.
The company would raise the funds through an institutional placement and pro rata renounceable entitlement offer, which have both been fully underwritten.
The placement would be priced at A$3.25 a share to raise some A$98-million, with the shares issued under the placement representing a 13% share in Syrah, on the completion of the capital raise.
Under the entitlement offer, Syrah shareholders would be able to subscribe for four new shares for every 19 shares held, with the offer also priced at A$3.25 a share.
The entitlement offer was expected to raise A$113-million and would comprise an accelerated institutional component and a retail component.
The offer price represented an 11.7% discount to the last closing price of Syrah shares.
A recent feasibility study estimated that the Balama project would require capital investment of some $138-million to deliver a 380 000 t/y operation. During the first ten years of operation, during which time the mine was expected to produce at an average rate of 365 000 t/y graphite concentrate, the Balama project would deliver a free cash flow of $160-million a year.