Mincor Resources is set to revive its Western Australian nickel operations next year after launching a $35 million capital raising to fund its 2020 restart strategy.
The company plans to raise the funds to start early works at its Kambalda based Cassini and Long-Durkin production hubs, which have been suspended since 2015.
Mincor’s planned works will begin ahead of the expected completion of the definitive feasibility study (DFS) in the March 2020 quarter. They include pre-development activities such as clearing, box-cut and decline at Cassini and underground development at Long-Durkin.
Drilling throughout 2019 has been promising for the revamp of nickel mining at Kambalda, with a mineral resource upgrade in Cassini during November to 1.254 million tonnes at 4 per cent nickel for 50,400 nickel tonnes.
Mincor will raise the funds through a placement of $30 million to strategic investors, institutions and other sophisticated professional investors.
It will also offer a share purchase plan to eligible shareholders on the same terms as the placement to raise an additional $5 million, at an issue price of 60 cents per share.
Mincor managing director David Southam said the capital raising marked another important milestone in the company’s journey to resume profitable and sustainable nickel mining at Kambalda.
“The commitment of existing institutional and sophisticated shareholders shows our recent success with Cassini and other milestones have gained traction with investors,” Southam said.
“The capital raising effectively puts us ahead of the curve in terms of the normal evolution of a resource developer as we progress from DFS to production.
“Mincor is planning to be in operation for many years and this important upfront investment in our project pipeline will help us to achieve that objective, creating a platform to continue growing our ore reserves well into the future.”
Mincor is also planning to use the funds to up its exploration at Kambalda, budgeting approximately $8 million for exploration and resource drilling extension programs in the 2020 calendar year.