Polymetals Resources Ltd (ASX:POL) has received a financial boost on the path to restarting the Endeavor Zinc-Silver Mine in the Cobar Basin of central New South Wales with $6.2 million raised in a placement.
The placement was strongly supported by existing and new domestic and offshore sophisticated, professional and institutional investors and the company is particularly pleased to welcome a number of new, specialist resource investors to the register.
Metals Acquisition Ltd (ASX:MAC, NYSE:MTAL), which recently made a strategic investment in Polymetals, has committed to participate in the placement to maintain its current 4.3% shareholding.
“An exciting time”
Polymetals executive chairman Dave Sproule said: “We are very pleased with the interest received and welcome our new shareholders to Polymetals.
"This equity raising has strengthened both our balance sheet and share register at an exciting time for the company and its Endeavor Mine strategy.”
The company is now well-funded with a pro forma cash position of ~$8.7 million, following the equity raising and recent cash receipt of $2.5 million from MAC. In addition, MAC has also committed to a further $2.5 million conditional equity payment.
Use of funds
Placement funds will be applied to complete geotechnical drilling, the Endeavor Mine restart optimisation, further exploration and the start of refurbishment activities.
"Polymetals is now well funded to undertake geotechnical drilling to assess use of lower cost mining methods for silver-rich ore early in the mine life, finalise optimisation of the Endeavor Mine Restart, start refurbishment activities and carry out exploration drilling at its near-mine prospects, such as Carpark and near-mine copper targets,” Sproule added.
In addition to the placement, $1.4 million of unsecured loan facility provided by the executive chairman will separately be converted into equity at $0.28 per new share, subject to shareholder approval.
Placement details
Polymetals will issue 22 million new shares at $0.28 per share to raise $6.16 million, before issue costs, with these to be issued in a single tranche and in line with the company’s existing ASX Listing Rule 7.1 and 7.1A capacity.
Further, existing shareholder SPARTA AG has committed to subscribe for an additional 2 million POL shares at $0.28 per share to be issued as a conditional placement, subject to Polymetals’ shareholder approval.
The offer price represents:
- a 20.0% discount to the price at which MAC has made its initial strategic investment into the company of $0.35 per share;
- a 17.6% discount to the 1-month trading price of $0.34 per share; and
- a 10.4% discount to the 3-month trading price of $0.31 per share.
Blue Ocean Equities Pty Ltd acted as sole lead manager and bookrunner to the transaction.