Galena Mining Ltd (ASX:G1A) has raised $17 million (before costs), having accepted binding commitments for a placement of 136 million new shares at an issue price of $0.125 per share.
The placement was heavily oversubscribed and was highlighted by G1A’s largest strategic investor, Tim Roberts, making up around $4.4 million of the raise.
Another big investor was project financing debt provider, Taurus, which subscribed for around $3.8 million worth of shares.
Use of funds
Money raised will be used to provide Abra Mining Pty Ltd (the Abra Project joint-venture entity) a temporary unsecured reserve facility (URF).
Galena will provide Abra with $18 million and $12 million will come from the company’s joint-venture partner Toho Zinc Co., Ltd for a total of $30 million, with the money to be used during the critical commissioning and initial ramp-up stages of the Abra Base Metals Mine up until the project completion tests are satisfied under the Taurus Debt Facilities (anticipated to be 2H CY2023).
Funds will provide working capital and a cost buffer for AMPL to draw in the event of unforeseen circumstances and costs such as weather-related road or port closures or other events.
Any drawn amounts will become unsecured shareholder loans to AMPL whilst undrawn amounts will be returned to each of Galena and Toho in their respective 60:40 share.
Abra remains on-target for Q1 2023 production and for total project capital expenditure to be on budget as per regular monthly updates.
Production coming in 2023
Managing director Tony James said of the funding: “With first concentrate production coming in early 2023, we felt it critical to ensure our Abra Project has an adequate funding buffer to deal with any unforeseen circumstances during the commissioning and ramp up phase of the mine.
"t’s very pleasing to see the ongoing strong support from our key stakeholders who continue to support us in the development of our world-class lead-silver mine.”
The Abra Base Metals Mine, 60% owned by Galena, is a globally significant lead-silver project in the Gascoyne region of Western Australia (between the towns of Newman and Meekatharra, around 110 kilometres from Sandfire’s DeGrussa Project).