True North Copper (ASX:TNC) has tapped investors for $15 million to fund the Great Australia Mine restart and copper exploration in Queensland.
The $71.55 million market capitalisation company says the placement will seek to raise about $10.7 million in cash — including about $4.3 million in debt converted — through a placement of 125 million new shares at $0.12 per share.
Bell Potter Securities and Morgans Corporate are acting as joint lead managers and joint bookrunners to the placement while Foster Stockbroking acts as co-manager. Steinepreis Paganin is acting as legal advisor.
True North Copper Managing Director Marty Costello says the placement comes ahead of the scheduled completion of a mining study for the Great Australia Mine, which is anticipated to be wrapped up by December this year.
Funds from the capital raising, in conjunction with existing cash, will be applied to exploration and mine life extension drilling at its Cloncurry Project and other activities across its project portfolio.
This includes further drilling and survey works at the Vero resource within its Mt Oxide Project, conversion of a short-term loan from significant shareholder Tembo Capital Holdings plus accrued interest to equity, partial repayment of a short-term working capital facility to Dyda Property Management, and general working capital.
Funds from the placement are expected to be issued under 2 individual tranche payments comprising $8.3 million through 69.2 million new shares and $2.4 million in cash and about $4.3 million in debt converted through 55.8 million shares, respectively.
As part of the placement, Tembo Capital Holdings provided a firm commitment — subject to shareholder and foreign investment review board (FIRB) approval — to secure just over 54 million new shares under tranche 2 of the placement, providing $6.5 million of the desired $6.7 million.
This commitment, inclusive of a conversion of the short-term capital facility from debt to equity at the placement price, will assist True North in unlocking further liquidity through targeted working capital facilities. These facilities are in ‘very advanced’ stages of negotiations.
Meanwhile, True North Copper has signed a term sheet with a specialist mine finance group to provide US$28 million in a finance facility to support the growth of the business.
The signed term sheet on a financing facility is designed to refinance the current cash backed environmental bonds and provide additional working capital to support the commencement of mining at Great Australia. The finance party is in the final stages of due diligence ahead of executing definitive documentation.
New shares under tranche one of the placement are expected to settle on 24 November this year and will be issued on 27 November.
Costello and Chairman Ian McAleese both subscribed for about 583,000 new shares collectively in the placement, however, this is subject to shareholder approval at an upcoming meeting.
True North Copper is a precious metals-focused explorer headquartered in Cairns, Queensland. The company has assets across Queensland considered prospective for precious and critical minerals.
Write to Adam Drought at Mining.com.au
Images: True North Copper