Mincor Resources will raise up to $23 million to fast-track its plans to restart high-grade nickel sulphide mining near Kambalda in Western Australia.
The funding plans follow yesterday’s announcement that Mincor is purchasing Independence Group’s (IGO) Long nickel operation for up to $9.5 million.
Commenting on the equity raising and acquisition, Mincor managing director David Southam said the capital raising represented the confidence investors had in the company’s nickel portfolio.
“The success of the Placement and the high level of interest received from institutional investors shows that our nickel restart plans are now rapidly gaining momentum,” he said.
The transaction included $3.5 million in shares on completion of the deal and an additional $6 million in contingent payments, with completion of the transaction scheduled for this end of May.
Long has been placed in care and maintenance since mid-2018 after over 16 years of continuous production, with the project having produced more than 135,000 tonnes of nickel in ore.
IGO initially acquired the site in 2002 from WMC Resources when the project contained 69,000 tonnes of nickel.
IGO managing director and chief executive officer Peter Bradford reflected on the contribution Long made to IGO, saying the decision to sell aligned with its future strategy.
“Long has been an important part of Kambalda’s history since the 1970’s and a key driver of growth for IGO since it was acquired in 2002,” he said.
“While IGO recognises the opportunity for future discovery at Long, we are focused on belt-scale discoveries aligned with our strategy to be a globally relevant supplier of metals critical to clean energy and energy storage.”
The decision by Mincor to acquire Long further consolidates its presence in the Kambalda district, with Southam saying it adds a new leg to the company’s nickel sulphide portfolio.
“This is a well-timed strategic opportunity for Mincor which represents a value-accretive and logical consolidation step in the context of our broader plans to restart high-grade nickel sulphide mining in the Kambalda District,” he said.
“As well as expanding our strategic footprint in the North Kambalda Dome, the acquisition of the fully maintained mine infrastructure at Long opens up opportunities to exploit the existing high-grade mineral resource.”
The move forms part of Mincor’s nickel restart strategy, which will involve delivering a definitive feasibility study for an integrated mine plan operation during the December quarter. The strategy will include potential synergies and mining inventory from the Long operation.