Mincor raises AU$60 million for development and exploration

Firm to spread capital raising across development of Northern Operations, and for exploration and resource definition drilling at Cassini Operation

Mincor Resources, the Australian company focused on nickel production, has announced a AU$60 million capital raising to accelerate the underground development of the company’s Northern Operations, as well as underground exploration and resource definition diamond drilling at its new Cassini Operation.

A statement added that the remaining proceeds will be used to strengthen the company’s balance sheet as it continues the ramp up of its Kambalda Nickel Operations over the remainder of FY2023, ahead of full-scale production.

“The offer comprises a fully underwritten placement to certain eligible institutional, sophisticated, and professional investors to raise AU$55 million (before costs) and a non-underwritten SPP targeting to raise an additional A$5 million (before costs),” the company said, adding that the offer has been priced at A$1.39/share, representing a 14.4% discount to the Company’s 5-day VWAP up to and including 8 December 2022, and a 5.1% discount to the Company’s 30-day VWAP up to and including 8 December 2022.

Mincor said that it intends to allocate up to AU$20 million of the proceeds from the offer towards advancing development activities around the recently announced Golden Mile/LN04a zone. With development originally forecast for mid CY2023, the company said that it intends to bring this development forward, fast tracking grade control drilling and development access works, such as capital works, ore drive development and additional drilling, as well as continuing the existing extensional drilling program across the Northern Operations.

Under this scenario, it expects preparatory development works to commence in January 2023, with first ore development expected during the Q4 FY2023 quarter, the statement continued. 

The Golden Mile/LN04a area represents a brand-new mining horizon for the company’s Northern Operations, with the initial 12.5kt Ni Ore Reserve a substantial early success in the Golden Mile exploration zone.

The company added that it believes there is outstanding potential to discover additional nickel mineralisation within the Golden Mile, with the potential to significantly extend the mine life of its Kambalda Nickel Operations.

Allocation of capital raised

AU$15 million of the proceeds of the capital raise will be allocated towards accelerating the underground exploration and resource definition drilling program at Mincor’s Cassini operations, the statement continued. 

This program was initially forecast to commence late in FY2023 given existing drill rig availability. However, the company said that it now intends to commence drilling at Cassini by late January 2023, utilising a third underground diamond drilling rig secured recently from its diamond drilling contractor.

“Securing a third diamond drill rig is an exciting development for the Company, enabling simultaneous drilling of both high-priority underground targets – Golden Mile and Cassini. Underground drilling from Cassini will initially take place from existing stockpile development in the main Woodall Decline, with early programs targeting the highly prospective Cassini North channel,” the statement said.

“Similar to the Golden Mile, the potential for Resource extensions at Cassini is enhanced by the proximity to existing high-quality infrastructure, with Cassini offering exciting opportunities to introduce near-term additional ore sources and materially extend mine life.”

Finally, the company said that it intends to use the balance of the AU$60 million raised to further strengthen and de-risk its balance sheet over the remainder of the FY2023 ramp-up year, providing sufficient headroom to mitigate unforeseen ramp-up delays and to clear scheduled hedges.

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