PERTH (miningweekly.com) – ASX-listed Independence Group will take an 18.4% stake in base metals miner New Century Resources as part of that company’s A$51.1-million capital raise.
New Century on Tuesday said that the capital raise will consist of a share placement and fully underwritten accelerated non-renounceable entitlement offer.
New Century has executed a subscription agreement with Independence Group, which will see the metal miner invest A$27-million through a A$23.775-million share placement and a A$3.225-million sub-underwriting commitment under the entitlement offer, taking an 18.4% stake in Century Resources.
As a result of this investment, Independence will have the right to appoint one member to the New Century board, subject to the company maintaining ownership of more than 10% interest in Century.
In addition to the share placement, the two companies have also agreed to a strategic relationship, which would allow for collaborative assessment of opportunities within the existing New Century tenements, or other mining assets identified by the company’s ongoing due diligence programme.
If an asset is jointly assessed as a suitable acquisition, the two parties could enter into a joint venture or other commercial arrangement.
The strategic relationship agreement would cease to exist once Independence’s share in Century Resources falls below 10%.
Independence MD and CEO Peter Bradford on Tuesday said that the company was pleased to support New Century through its placement, and looked forward to both the success of the current operations and potential collaboration with the company on any future clean energy metals focused exploration, or other business development initiatives that could add shareholder value.
In addition to the share placement to Independence, New Century will also undertake a fully underwritten entitlement offer to raise a further A$27.3-million, offering two new shares for every seven shares held, priced at 15c a share, representing a 19% premium to New Century’s five-day volume weighted average share price.
The entitlement offer is fully underwritten by Canaccord Genuity, with Independence having a priority sub-underwriting allocation of A$3.225-million as part of its larger investment.
“This fully underwritten capital raising provides important working capital for Century, which is now an established top ten zinc mine globally, and in the final stages of operational ramp-up to nameplate 12-million-tonne-a-year capacity,” said Century Resources MD Patrick Walta.