Polymetals Resources Ltd has raised A$35 million before costs at A$0.80 per new fully paid ordinary share, leaving it well-funded with approximately A$37 million in the bank as well as access to around A$26 million in undrawn debt finance facilities and ensuring sufficient capital for the planned restart of the Endeavor silver-zinc operation in central NSW.
Funds from the single-tranche placement will strengthen the company’s balance sheet as it moves toward first silver and zinc production at Endeavor, expected in the second quarter of 2025.
The funds will also support near-mine exploration activities, including work at the Carpark prospect, as well as broader regional exploration initiatives. A portion of the capital will be allocated to corporate and general working capital requirements.
Restart on track
"We are extremely grateful for the support shown to Polymetals from both our existing shareholders and the new investors we now welcome to the Polymetals share register,” Polymetals executive chairman Dave Sproule said.
“Our Endeavor restart activities remain on track and the Polymetals team looks forward to commissioning the operation to become Australia’s next silver and zinc producer.
"Timing is particularly encouraging against the backdrop of strong A$ zinc and silver prices and the favourable treatment terms currently available to zinc concentrate producers.
“During the past two years, collation and validation of 50 years of exploration data has identified numerous and compelling near-mine and regional exploration targets.
"Alongside our measured approach to testing of the Carpark Prospect to the immediate south of the Endeavor mine, we have been building our exploration team with practical, experienced staff to advance to testing high-priority targets.
"As well as strengthening the Polymetals balance sheet, funds from this raising will allow us to significantly step up the company’s exploration activities and we look forward to updating the market on our exploration results.
“With this equity raising achieved, we believe the Polymetals team is very well-positioned to begin the next chapter in ‘Making Endeavor Great Again’ with the establishment of strong and sustainable cash flow and providing a significant and lasting contribution to the community of Cobar and the mining industry in New South Wales.”
Use of funds
The money raised will be used to assist in restarting the Endeavor zinc-silver mine. Proceeds from the equity raising will be allocated as follows:
- Balance sheet strengthening – A$15.5 million to support the company’s transition towards first silver and zinc production at Endeavor, expected in Q2 2025.
- Exploration expansion – A$10 million allocated across calendar years 2025 and 2026 to significantly increase near-mine exploration, including at the Carpark prospect, as well as broader regional exploration initiatives.
- Corporate and general purposes – A$7.8 million for corporate and working capital requirements.
- Placement costs – Approximately A$1.68 million in associated costs.
About the raise
Polymetals has welcomed several specialist resources investors to its share register, while receiving strong support from existing and new investors, including sophisticated, professional and institutional participants from domestic and offshore markets.
The company will issue 43.75 million new shares at an issue price of A$0.80 per share, which will be issued in a single tranche under the company’s existing capacity.
As the placement involves the unconditional issuance of shares in a single tranche, company directors will not participate. However, all directors have confirmed their intention to acquire shares through an upcoming share purchase plan (SPP).
The offer price of A$0.80 represents:
- A 6.4% discount to the closing price of A$0.855 on February 6, 2025,
- A 9.5% discount to the 15-day volume-weighted average price (VWAP), and
- A 6.8% discount to the 30-day VWAP of A$0.858 prior to the company entering a trading halt on 6 February 2025.
The placement is expected to settle on Friday, February 14, 2025.
Share Purchase Plan
Polymetals will also undertake a SPP to allow existing shareholders registered on February 7, 2025, to purchase up to $30,000 of shares at $0.80/share.
The company may raise up to A$3.2 million under the SPP at the same price as the placement, set at A$0.80 per new share
As the SPP is not underwritten, the total amount raised may be less than A$3.2 million and the company may accept additional applications, resulting in a higher total raise or scale-back applications, either in whole or in part, should the total demand exceed its requirements.
Further details regarding the SPP, including its terms and conditions, are expected to be provided to eligible shareholders on Tuesday, February 18, 2025, along with the SPP Offer Booklet. Shareholders are encouraged to review the full terms before deciding whether to participate.
Polymetals directors who are residents of Australia or New Zealand are permitted to participate fully in the SPP, with all directors confirming their intention to acquire shares through the plan.
Endeavour on track
Last week, the Polymetals noted it was on track for the restart of the Endeavor Silver-Zinc Mine.
The company continues to prioritise capital-efficient and timely refurbishment activities to ensure the planned production timeline is met. Surface and underground works are advancing as planned, with critical path activities commencing on schedule.
Delivery of the mobile fleet remains on track in line with the ramp-up of operations, while efforts are underway to re-establish access to the high-grade silver Upper North Lode (UNL).
Read more: Polymetals Resources readies for Endeavor Silver-Zinc Mine restart and first cash flow
Sproule talked with Proactive’s Tylah Tully about the latest developments at the Endeavor Silver-Zinc Mine, where underground rehabilitation is well underway.
