Broken Hill Mines (ASX:BHM) has completed a fully underwritten $90 million capital raising to fund production decline development and accelerated drilling at its Centenary and Pinnacles projects in New South Wales.
The capital raising comprises an $85 million two-tranche placement and a $5 million share purchase plan (SPP), with placement demand reportedly exceeding the original funds sought.
Executive Chairman Patrick Walta says the company is ‘delighted’ with the support the placement received, noting that it accepted oversubscriptions and undertook scaling due to ‘strong’ investor interest.
“The demand for the placement highlights the significant opportunity that [the] Centenary and Pinnacles underground growth projects present for BHM,” Walta says.
The placement was priced at $0.76 per share, representing a 10.1% discount to the last closing price on 25 August and a 6.3% discount to the 15-day volume weighted average price.
Proceeds are earmarked for a Centenary production decline, accelerated resource drilling, and infrastructure upgrades, as well as production growth and resource drilling at Pinnacles.
The placement will be completed in two tranches, with $60 million raised under the company’s existing capacity and $25 million subject to shareholder approval at a general meeting on 12 October.
Tranche one shares are expected to settle on 3 September and be issued the following day (4 September), while tranche two shares are expected to settle on 16 October following shareholder approval.
BHM notes eligible Australian and New Zealand shareholders may participate in the SPP for up to $30,000 at the same price as the placement. The SPP is fully underwritten up to $5 million.
The company expects to release the SPP offer booklet on 4 September, with the SPP closing anticipated on 16 September.
Separately, BHM has signed a non-binding letter of intent (LOI) with existing zinc offtake partner Ausinmet for expanded offtake and a US$30 million ($41.67 million) working capital facility.
The proposed offtake covers up to 200,000 tonnes of zinc concentrates, with pricing based on London Metal Exchange cash settlement prices. The working capital facility would be drawn at SOFR (secured overnight financing rate), plus 3.5% per annum.
The LOI is subject to customary conditions and third party consents and requires definitive documentation within 90 days.
Petra Capital acted as sole lead manager, bookrunner, and underwriter to the offer, with Euroz Hartleys as co-lead manager.
Broken Hill Mines is a base metals explorer and producer focused on silver, lead, and zinc, with key operations in NSW.
Write to Paula Fabe at Mining.com.au
Images: Broken Hill Mines
