True North Copper’s largest shareholder to fund 25% of equity raise

True North Copper’s (ASX:TNC) largest shareholder Tembo Capital Holdings UK has committed to participate up to $6 million in the company’s fully underwritten $24.3 million equity raising.

Tembo Capital, which has a 32% shareholding on an undiluted basis, has committed the funds through the institutional entitlement offer and priority sub-underwriting of the retail entitlement offer.

True North’s debt provider Nebari Natural Resources Credit Fund II has committed to sub-underwrite the retail entitlement offer for up to $500,000.

Canaccord Genuity (Australia) and Morgans Corporate are acting as underwriters and joint lead managers to the equity raising.

The fully underwritten capital raising will fund True North through to steady state production at the Cloncurry Copper Project, including contingency, working capital, and other corporate expenses.

True North Copper Executive Chairman Ian McAleese says the funds will strengthen its financial position and fund exploration to grow resources and reserves at Cloncurry and target new discoveries at its Mt Oxide Project in 2024.

The equity raising comprises an institutional placement of about 135.2 million new shares utilising the company’s available capacity to raise $7.6 million. It also includes one-for-two pro rata accelerated non-renounceable entitlement offer of 298.2 million new shares to raise $16.7 million.

Up to 433.4 million new shares are to be issued under the equity raising, representing about 77% of the existing shares on issue.

McAleese says the company’s goal is to restart operations at Cloncurry to become Australia’s next copper producer and this equity raising will strengthen the balance sheet.

“Backed by our binding offtake and toll milling agreements with Glencore (LON:GLEN), we are ready to transform our Cloncurry Project into a profitable mining operation,” the Executive Chairman says.

“First copper concentrate sales from commercial mining at CPP is expected in 2H 2024 at a time when copper prices are at 10 year highs. Cash flow from mining will fund extensive exploration at both Mt Oxide and the Cloncurry district.

We are grateful for the support from our new and existing Shareholders in this – in particular Tembo Capital and Nebari who have committed to sub-underwrite our retail entitlement offer.

In addition to restarting Cloncurry, we have vast potential to grow resources and reserves for this project as well as further build our inventory at the Mt Oxide Project, with a +10km prospective trend we are keen to explore in addition to our Vero Resource which hosts a resource of nearly 16 million tonnes at 1.43% copper and 6.91 g/t silver total combined measured, indicated, and inferred resource.”

The entitlement offer is non-renounceable and comprises an accelerated offer to eligible institutional shareholders in Australia, Canada (British Columbia, Ontario, and Québec provinces only), Hong Kong, Singapore, the United States, the UK, the European Union (excluding Austria), Switzerland, British Virgin Islands, Guernsey and Papua New Guinea.

The retail offer is expected to open on 30 May 2024 and close at 5pm AEST on 11 June 2024.

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Images: True North Copper
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Written By Adam Orlando Editor-in-Chief Adam Orlando has more than 20 years’ experience in the media having held senior roles at various publications, including as Asia-Pacific Sector Head (Mining) at global newswire Acuris (formerly Mergermarket). Orlando has worked in newsrooms around the world including Hong Kong, Singapore, London, and Sydney.