PERTH (miningweekly.com) – Nickel miner Panoramic Resources on Monday announced a A$90-million capital raise to de-risk the restart of its Savannah nickel mine, in Western Australia, and to fund project enhancement activities.
Panoramic told shareholders that it would undertake a fully underwritten institutional placement, and a 1.15-for-1 entitlement offer.
Western Areas has entered into a subscription agreement with Panoramic for the placement of 410-million shares to raise some A$29-million, at an offer price of 0.7c a share.
Western Areas MD Dan Lougher said that the investment in Panoramic was consistent with the company’s growth strategy and increased its exposure to the emerging new energy vehicles market dynamic.
“We are encouraged by the development potential of the Savannah North orebody and believe that Panoramic’s decision to continue to invest in capital development will position the operation well for the projected upswing in nickel, copper and cobalt demand driven by the new energy vehicle thematic.
“The capital raising will ensure that the Savannah project is production-ready for when a decision is made to restart the operation. We are also excited by the near-term and regional exploration opportunities at the Savannah project,” said Lougher.
On the completion of the capital raise, Western Areas will be granted the right, but not the obligation, to appoint a representative to the Panoramic board, with the two companies also forming a technical committee to provide technical assistance to the Savannah project.
In addition to the share placement to Western Areas, Panoramic will also undertake a 1.15-for-1 accelerated pro rata non-renounceable entitlement offer, placing up to 878-million new shares to raise some A$61-million.
The offer price of 0.7c a share represented a 41.7% discount to Panoramic’s last closing price on April 9, and a 21% discount to the company’s theoretical ex-rights price.
The entitlement offer is being fully underwritten by Canaccord Genuity and Morgans Corporate.
Panoramic told shareholders that the funds raised by the share placement and the entitlement offer would be used to repay a senior loan and subordinated loan facility, while also providing general working capital. The funds would also cover suspension costs, care-and-maintenance costs and would fund the development activities required to restart Savannah, including the completion of critical ventilation infrastructure for Savannah North.