True North Copper (ASX:TNC) is conducting a $50.3 million conditional placement, as part of a broader recapitalisation, which will support funding a new exploration strategy.
Under the placement, 10.06 billion shares will be issued at $0.005 per share — representing a 83.3% discount to the last close price of $0.03 — and includes a $300,000 drill-for-equity arrangement with Mitchell Services.
Nebari Natural Resources Credit Fund II has also agreed to convert part of its outstanding debt owed by the company, totalling $3.9 million, into shares in True North via a debt-to-equity conversion.
Once completed, True North will be debt free with a ‘robust’ balance sheet to fund the revised business strategy which is focused on definition drilling at the Cloncurry Copper Project in Queensland, expanding the mine life and optimising the previous mine plan, as well as an extensive exploration program at the Mt Oxide Project.
Canaccord Genuity and Morgans Financial will act as joint lead managers, underwriters, and bookrunners to the placement.
At Mt Oxide, the company is targeting the discovery of multiple near-surface deposits with similar characteristics to the Vero deposit, which contains an indicated and inferred resource of 15.03 million tonnes at 1.46% copper.
True North notes it will not conduct any work consistent with ramping up to or maintaining production at any of its processing facilities during the next 12 months, as part of its revised business strategy.
In addition to the placement, True North plans to offer eligible shareholders the opportunity to participate in a share purchase plan to raise up a further $5 million at the same offer price as the placement.
Managing Director Bevan Jones says recapitalising True North is a great outcome and a testament to the strength of the company’s outlook and portfolio of copper assets.
“With a strong cash position, zero debt and a new experienced board and leadership team, we now have the opportunity to refocus our strategy and explore growth opportunities,” Jones says.
“The new True North strategy is to pause, drill, and optimise our existing highly prospective lease package.
“We have recently completed extensive surface mapping at Mt Oxide including rock chip sampling and a very successful geographic information system induced polarisation survey. We have found that there are previously unknown, multiple mineralised zones that point to a district size mineral system much bigger than just the Vero deposit.”
Jones adds that the company has paused mining at Cloncurry and has moved into a low-cost base while True North rethinks the original, small scale starter pit strategy.
“Surface exploration has identified multiple new targets at our Cloncurry Copper Project,” he says.
“Geophysical surveys have produced potential mine-scale-changing targets within our current mining leases. Exploration around our Wallace North lease package has also led to potential underground extensions to the ore body.
“We look forward to undertaking our extensive drilling programs at Cloncurry and Mt Oxide, commencing in Q1 2025.”
Last week, the company’s creditors voted in favour of the equity recapitalisation plan, which will be seeking shareholder approval at an upcoming annual general meeting on or around Friday 20 December 2024.
True North Copper is a copper, cobalt, and critical minerals-focused company, headquartered in Cairns, Queensland. The company is primarily focused on its two projects, Cloncurry and Mt Oxide, both located in north-west Queensland.
Write to Aaliyah Rogan at Mining.com.au
Images: True North Copper
