Metro Mining (ASX:MMI) has tapped domestic and international institutional investors for $40 million, receiving binding commitments to raise the cash via a placement.
Shaw and Partners acted as sole lead manager and bookrunner to the placement.
Metro says shares under the placement will be issued to investors at $0.041 each. The placement is accompanied by a $4 million share purchase plan (SPP), which was launched today.
The company will issue 975.6 million new shares under the placement, representing 20% of shares on issue. The offer price is a 10.9% discount to the last closing price on 29 April 2024 and an 8% discount to the five-day volume weighted average price.
Settlement of the placement is scheduled for 9 May 2024 with allotment on 10 May.
Eligible shareholders will also have the opportunity to apply for up to $30,000 worth of shares at the same price as the placement under the concurrent SPP.
Proceeds from the placement will be used to repay $39 million of debt, consisting of $21 million in junior debt and a $4 million working capital facility — payable immediately — as well as an additional $14 million in junior debt, due for repayment in July.
The remaining funds from the placement, coupled with the proceeds of the SPP, will be allocated to expenses related to the capital raises and working capital.
Once the junior debt is repaid, Metro notes it will be better equipped to refinance its senior debt on improved terms, and could potentially release $20 million of cash back into the business with the inclusion of a bonding facility.
Metro believes the accelerated repayments strengthen its balance sheet, with pro forma cash of $22 million and net debt of about $60 million following completion of the placement.
“After creating resilience in the business, this capital underpins the production and cash inflection point at a time when the bauxite market is undergoing significant growth,” Managing Director and CEO Simon Wensley says.
Metro’s capital raises come a week prior to the company’s attendance at the RIU Sydney Resources Round-up at the Darling Harbour’s Hyatt Regency on 7 to 9 May 2024.
Mining.com.au is a media partner of this year’s conference.
Last year’s RIU Sydney Resources Round-up attracted more than 1,500 delegates, making it the busiest since its inception in 2004. With over 800 of last year’s delegates coming from the investor or broker/fund categories, this conference offers investor engagement opportunities.
Metro Mining is a Queensland-based miner and explorer focused on its flagship Bauxite Hills Mine in Cape York.
As of 31 March 2024, the company had $2.77 million in cash and cash equivalents at hand, according to its latest quarterly report.
Write to Adam Drought at Mining.com.au
Images: Transhipment Services Australia
