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Today, on May 24, 2019, Mincor Resources NL (ASX:MCR) announced the capital raising of up to $23 million (before costs) to accelerate its plan to restart high-grade Nickel Sulphide mining in the Kambalda District of Western Australia. The capital raising comprises $18 million placement to professional, institutional, and sophisticated investors at $0.40 per share, and a share purchase plan (SPP) to raise up to $5 million of additional capital. This development follows the lately announced binding agreement to purchase the Long Nickel Operations from Independence Group NL, a recent drilling success, Mineral Resource upgrade at the Cassini, the offtake term sheet with BHP Nickel West, and a significant level of investor interest in the companyâs potential to again become one of Australiaâs leading Nickel Sulphide miners in the near term.
Time-table for SPP:
David Southam, companyâs Managing Director, stated that the success of the placement and the high level of interest received from the institutional investors will ensure fast-track plans to acquire long, completion of the offtake term sheet with the BHP Nickel West and the recent Cassini Mineral Resource upgrade.
In its Investor Presentation Report, MCR highlighted the operational updates. The binding agreement to acquire Long Nickel from IGO, with $3.5 million upfront consideration to be satisfied by the issue of around 7.8 million MCR shares at a deemed price of $0.45 per share. Up to $6 million of the amount is payable in cash or shares at the option of MCR, based on Long Nickel production milestones. IGO supports the companyâs strategy and therefore, has agreed to subscribe for $1.5 million worth of shares under the placement.
On the Long Nickel information front for FY18, the mineral resource has been estimated at 32Kt Ni (0.75mt @ 4.2% Ni) as compared to 54kt, 1.2Mt @ 4.6% Ni in FY17. IGO has been involved in the production from 2002 to 2018. Historically, Nickel production was ~10,000 tonnes per annum at the cost of A$4.09/lb (weighted average FY12 â FY18). All the requisite approvals remain in place, and Long Nickel remains de-watered and ventilated. As per the acquisition consideration, 7,777,778 fully paid Mincor ordinary shares (equivalent to ~A$3.5m) issued and to be escrowed for 12 months. Earn-out is expected to be $2.0 million payable on producing 2,500 tonnes of Ni contained in ore and an additional $4.0 million on producing 7,500 tonnes of Ni contained in ore from Long Nickel. MCR maintains sole discretion to pay contingent amounts either in cash or shares.
On the stock information front, at market close (on May 24, 2019), the stock of Mincor Resources was trading at $0.460, with a market capitalisation of ~$99.13 million. Today, it reached dayâs high at $0.460 and dayâs low at $0.425, with a daily volume of 1,407,941. Its 52 weeks high price stands at $0.520 and 52 weeks low price at $0.315, with an average volume of 313,985 (yearly). Its absolute returns for the past one year, six months and three months are 3.45%, 28.57%, and 21.62%, respectively.
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