Cyclone Metals Ltd (ASX:CLE) has received firm commitments for a placement to raise A$1.04 million at an issue price of 0.5 cents per fully paid ordinary share.
Funds raised from the placement will be used to repay ATO debt of $780,000 and for working capital at the company’s Lady Ethleen Copper Project in central Queensland.
Participants of the placement will also be entitled to receive one unlisted option for every two shares at the exercise price of 0.5 cents, expiring 12 months from the date of issue.
The placement is expected to complete on or about December 17, 2020.
“Excellent investment portfolio”
The company’s financial position continues to improve, with debt already reduced from $8.1 million at June 30, 2020, (including an amount payable to the ATO of $3.1 million) to $3.4 million (including an amount payable to the ATO of $2.4 million) once the placement is completed and the ATO debt is paid down.
Cyclone executive director Tony Sage said: “The company has gone through a difficult period but now has an excellent investment portfolio and several projects with very little debt.
“We will continue to work on these projects but as always, we will be on the lookout for any new projects that may come along and which we can add value for shareholders.”
The company’s investments in listed companies are currently valued at $9.2 million.
Copper growth expected
Looking forwards, the company is capitalising on forecasted strong growth in copper demand and the increasing prevalence of electric vehicles to undertake a trial leach program on its Lady Ethleen Copper Project in central Queensland using an environmentally friendly alkaline leach processing solution.
Preparatory work is underway for the exploration program required to provide sufficient samples for the trial program, with the program anticipated to be completed within 4 to 6 months.
Additionally, Cyclone is also completing a desktop review of previous work on its rare earth tenements near Shark Bay, Western Australia while it awaits the Native Title clearance and grant, which will allow targeted ground-disturbing exploration once the tenements are granted.
Sierra Leone operations
The company continues to actively seek to resolve outstanding issues with Sierra Leone Government to allow the company to restart operations at the Marampa Iron Ore project.
Cyclone hopes that as travel restrictions imposed due to the COVID-19 global pandemic gradual lift steps can be taken to better engage with the Government to achieve this.
Notably, the current iron ore price has provided an impetus for other iron ore miners in Sierra Leone to actively engage with the Sierra Leone Government to resolve tenure disputes and recommence mining in Sierra Leone.
Although to an extent outside its control, the company believes that together with individual steps, collective engagement by multiple miners provides the best pathway for activities to recommence at Marampa.