Minbos Resources (ASX: MNB) will raise A$1.7 million after completing a bookbuild for a share placement to professional and sophisticated investors, with funds raised to enable strategic partner negotiations to be finalised.
The company has received firm commitments for the placement at $0.14 per share.
While Minbos is completing strategic partner negotiations, the funds raised will assist in finalising the Measured and Indicated resource drilling program at the high grade Kanzi Phosphate Project in the Democratic Republic of Congo.
They will also go towards progressing Bankable Feasibility Studies on the high grade Cacata Phosphate Project in Angola and Kanzi.
Placement details
The placement, which was managed by Patersons Securities and included clients of CPS Securities, will be undertaken in two tranches.
Tranche 1 comprises the issue of 6.27 million shares to raise $878,600 of the funds under Minbos’ 15% placement capacity.
Tranche 2 comprises the issue of 5.9 million shares to raise the remaining $832,959 million, with this tranche to be settled after the company’s Annual General Meeting on 19 November 2012.
Strategic partner
Funds raised from the placement will be used for working capital requirements to enable the company to finalise the process of evaluating, selecting and appointing a significant strategic partner.
Allying with a strategic partner will give Minbos the financial resources to complete the planned Bankable Feasibility Studies for the Kanzi Project and the Cacata Phosphate Project.
Scott Sullivan, managing director, commented: “Recently released announcements on the Scoping Studies prove that we have projects with very strong economics.
“The development of the Kanzi project in parallel to the development of the company’s high grade Cacata project will put Minbos in the unique situation of having two projects with low capital and operating costs in the development stage that can be brought online in the foreseeable future.
“The DRC projects in particular, of which we have a 65% share, are amenable to accelerated development due to already established and proximate infrastructure.”
Since Listing in October 2010, Minbos has delineated a substantial resource of 370 million tonnes at 12.2% P2O5, including 44 million tonnes at 21.4% P2O5 at its Kanzi Project and 22.5 million tonnes at 21.4% P2O5 at its Cacata Project.
Kanzi and Cacata metrics
A recent Scoping Study for Kanzi has demonstrated positive economics, confirming the potential of Kanzi as a viable project with an internal rate of return of 58% (pre-tax) and a net present value pf US$626 million (pre-tax) at a 10% discount rate.
Operating costs of US$56.03 per tonne of phosphate rock (FOB) and a capital cost of US$106 million (excluding contingency) have been estimated.
Meanwhile, Cacata is just as robust economically with an internal rate of return of 40.2% (pre-tax) and a net present value of US$311 million (pre-tax) at a 10% discount rate.
Cacata is forecast to have operating costs of US$57.23 per tonne of phosphate rock (FOB) and a capital cost of US$157 million (excluding contingency).
Importantly, there is the opportunity to reduce both operating expenditure and capital expenditure for both projects during the BFS.
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