PERTH (miningweekly.com) – Base metals developer Galena Mining has raised A$17-million in a share placement, which was significantly oversubscribed.

The company on Tuesday announced that it had accepted binding commitments for the placement of 136-million shares, at a price of 12.5c each.

The shares will be placed under two tranches, with the first tranche of 71.4-million shares to be placed under the company’s existing placement capacity. The second tranche of 64.4-million shares will be subject to shareholder approval at a general meeting scheduled for mid-September.

“With first concentrate production coming in early 2023, we felt it critical to ensure our Abra project has an adequate funding buffer to deal with any unforeseen circumstances during the commissioning and ramp-up phase of the mine,” said Galena MD Tony James.

“It’s very pleasing to see the ongoing strong support from our key stakeholders who continue to support us in the development of our world-class lead/silver mine.”

Proceeds from the placement will be used to provide Abra Mining a temporary unsecured reserve facility (URF). The URF will be A$30-million, contributed A$18-million and A$12-million by the company’s joint venture partner Toho Zinc Co.

The URF will be made available during the critical commissioning and initial ramp-up stages of the Abra base metals mine, up until the project completion tests are satisfied under the Taurus debt facilities, which is anticipated to be in the second half of 2023.

Its purpose will be to provide a working capital and cost buffer for Abra Mining to draw on in the event of unforeseen circumstances and costs such as weather-related road or port closures or other events. Any drawn amounts will become unsecured shareholder loans to Abra Mining while undrawn amounts will be returned to each of Galena and Toho in their respective 60:40 share.