PERTH (miningweekly.com) – Mineral sands developer Strandline Resources has launched a 1-for-1.3 pro-rata accelerated non-renounceable entitlement offer and institutional placement with the aim of raising A$122-million.

The ASX-listed company on Monday said that up to 402-million ordinary shares would be up for offer under the entitlement offer, at a price of 20.5c each, raising an initial A$83-million.

Existing shareholder Tembo Capital has committed to subscribe for 70-million shares in the retail entitlement offer, an investment worth A$14.4-million, Strandline told shareholders.

The placement of a further 191-million shares to institutional investors, also at a price of 20.5c each, will raise a further A$39-million.

The offer price represented an 8.9% discount to Strandline’s last closing price, and a 20.9% discount to its five-day volume weighted average share price.

Funds raised in the entitlement offer and share placement will go to towards funding the development of the Coburn mineral sands project, in Western Australia, along with an up to A$150-million loan facility from the Northern Australian Infrastructure Facility and a $60-million senior secured bond issue.

MD Luke Graham said on Monday that the company was firmly on the path to becoming a world-scale mineral sands producer in a tier-1 mining jurisdiction, generating strong financial returns underpinned by binding offtake contracts with leading global customers.

“The company is set to make a final investment decision once the proceeds from the equity raise are received next month, and then commence full-scale construction immediately after that, putting Coburn on track for production in the second half of 2022,” Graham said.

Located 240 km north of Geraldton, the A$260-million Coburn project has ore reserves of 523-million tonnes and an initial mine life of 22.5 years at a planned average mining rate of 23.4-million tonnes a year.

The entitlement offer will open on March 31 and will close on April 20.