Australia’s Metro Mining Limited announced earlier today that it has initiated a drive to raise A$52.4 million (US$40.2 million) in equity to continue operations at the Bauxite Hills Mine project on the northern tip of the Cape York Peninsula.
Metro says that the equity raising will consist of issuing about 419.4 million fully-paid ordinary shares, each with a price of A$0.125, which is a 19.4% discount from Metro’s most recent share price. A placement of about 126.9 million new shares to institutional and sophisticated buyers will raise up to A$15.9 million. An additional offering of a one for two pro-rata non-renouncable entitlement offer of roughly 292.3 million new shares is projected to raise up to A$36.5 million for the company.
Metro’s Managing Director Simon Finnis says that the capital raised will be used to pay down loans related to the acquisition of Gulf Aluminium last year, the purchase of long lead time items, the finalization of environmental approvals and bonds, grade-control drilling, and the completion of its Bankable Feasibility Study, which is scheduled to be released in a matter of weeks.
“We are delighted to introduce new institutional investors to the company while providing existing shareholders the opportunity to invest further,” he said.
“We aim to maintain our momentum at Bauxite Hills and strengthen the balance sheet as we rapidly progress toward becoming a leading independent bauxite producer.”
The equity-raising project will be supported by the firm Balanced Property which is expected to invest a further A$16 million in the company. In addition, Greenstone will maintain its 19.6% interest via an anti-dilution agreement.
Metro Mining is based in Brisbane, and began life when it was spun off from Cape Alumina Ltd. upon its takeover by MetroCoal Ltd in 2014. The firm has exploration rights in over 500 square miles of western Cape York, which is second to only Rio Tinto Alcan. Its primary asset is its Bauxite Hills Project, which is expected to yield up to four million metric tons per annum.