Elementos Limited (ASX:ELT) (OTCMKTS:ELTLF) (FRA:9EM) has received firm commitments from institutional, sophisticated and accredited investors to raise A$6.1 million through a placement to progress the development of its wholly-owned Oropesa Tin Project in Spain.
Under the strongly supported placement, the company will issue fully paid ordinary shares at a price of A$0.01 per share.
Participants will also receive options to acquire shares, on a one-for-two basis, with an exercise price at A$0.015 per share and expiring on April 30, 2022.
Elementos’ chairman Andy Greig said the capital raising would be used to bring a 48-hole drilling program to a close and fund the completion of an optimisation program designed to unlock further value in the project.
He said: “Oropesa is one of few globally significant, open-cut mineable tin deposits in the world.”
High tin prices
Tin metal supply disruptions and strong demand driven by global economic stimulus have pushed the LME tin prices to 10-year highs, trading over US$28,000 per tonne compared to US$13,450 per tonne a year ago.
Greig said “At a time when the gap between tin supply and demand is widening due to increasing consumption of electronic equipment and tin chemicals, Elementos is committed to bringing this project to life sooner rather than later.
“The recent appointment of Joe David as our new chief executive officer, who has a track record in taking projects from concept through to completion as well as over five years of experience in corporate finance, reflects this commitment.”
Enhancing project economics
“The drilling and optimisation plan at Oropesa was designed with the aim to increase the project’s overall resource, annual production and mine life,” the chairman said.
“The aim of the current program is to enhance the project’s economics by upgrading the size of the existing resource and increasing the confidence for the project.
“Following the completion of these optimisation works, a new JORC mineral resource estimate will be prepared and will add to the feasibility study work and ongoing environmental permitting activities.”
Placement details
The placement price of A$0.01 per share represents a 16.7% discount to the last close price of 1.2 cents and a 9.9% discount to the 5-day volume-weighted average price leading up to the announcement of the placement.
BW Equities acted as lead manager to the placement.
Elementos shares today have been as much as 20% higher to A$0.014.
Pre-feasibility study
Placement funds will also be used to advance the project’s Environmental Application ahead of completing a pre-feasibility study.
Exploration surveys and drilling of new targets at the company’s wholly-owned Cleveland Tin Project in Tasmania are also planned.
A geological review conducted in February 2021 identified a prospective region around 500 metres in length to the immediate northeast and along strike of the existing mineral resource.
An economic study completed in May 2020 demonstrated Oropesa’s attractive economics as a globally significant new tin development with prospective annual production of 2,440 tonnes over a 14-year mine life.
Conversion of chairman’s loan
Elementos has an outstanding balance of $569,246 concerning a loan facility provided by chairman Andy Greig.
In addition to the placement process, Greig and the company have agreed, subject to shareholder approval, to convert the total outstanding loan balance to equity, on the same terms as the placement.
In order to facilitate the shareholder approval and conversion process, the parties have agreed to extend the loan maturity date to June 30, 2021.