Strandline raises 50 million Australian dollars to finance its growth
PERTH (miningweekly.com) – Mineral sands developer Strandline Resources will raise A$50 million through an equity placement to institutional, sophisticated and professional investors to fund its growth aspirations.
The ASX-listed company said on Wednesday it would issue some 116.3 million shares, at a price of 43c per share, which is a 3.6% discount to the volume-weighted average price over ten days.
The equity placement will be made within Strandline’s existing placement capacity and will not require shareholder approval.
Strandline told shareholders that the proceeds will primarily be used to finance the near-term development of Strandline’s Fungoni mineral sands project in Tanzania, while in parallel advancing major feasibility studies and approvals for the full-scale project of Tajiri mineral sands in Tanzania and the potential future. the expansion of Strandline’s Coburn mineral sands project in Western Australia, which is currently under construction.
“Strong demand for the placement, led by institutional investors, reflects the quality of Strandline’s mineral sands growth portfolio and allows the company to further capitalize on growing global demand for critical mineral commodities,” Strandline MD Luke Graham noted.
In light of the significant increase in global mineral sands prices and strong uptake demand, the Company is accelerating preparations for its upcoming project development in Tanzania and Australia.
The decision to scale up activities follows the formation of the joint venture (JV) with the Tanzanian government, Nyati Mineral Sands, which will own all of Strandline’s Tanzanian mineral sands assets, including the advanced Fungoni and Tajiri projects. Fungoni is expected to be Nyati’s first mining development, followed by Tajiri, for which the environmental certificate was obtained last month.
In March, Strandline began updating the financial assessment of the Fungoni project, which will incorporate the latest financial information on the project, including updated forecasts of mineral sands prices, which have increased significantly in recent years.
Strandline had previously signed a S$26 million project finance facility agreement with Nedbank CIB for the development of Fungoni, representing a significant portion of the $35 million in capital required by Fungoni. The Nedbank facility is also being reviewed to incorporate Nyati joint venture requirements and complete remaining due diligence and credit approvals.
Strandline said the proceeds from the capital raise will allow the company to advance initial engineering design, finalize financing and advance long-term purchases, contracts, levies and early construction.
In late 2020, Strandline announced the results of the technical scoping study on the titanium-dominated Tajiri project, which highlighted that Tajiri will deliver strong financial returns over a 23-year lifespan, which underpins the outlook. of Strandline’s decades of production in Tanzania.
In March, Strandline received the environmental certificate for Tajiri, which is an essential prerequisite for the granting of a special mining permit (SML) and will remain valid for the life of the project.
Strandline noted that the proceeds from the fundraising will allow Strandline to progress into the next phase of assessment, implementation planning and authorization of the Tajiri project, with priority shifting to approval of the SML application. .
Earlier this week, Strandline announced that it had launched a scoping study to assess the potential to increase the planned production rate by up to 50% at its wholly-owned Coburn mineral sands project in Western Australia.
The potential production increase would aim to allow Coburn to further leverage its world-class resource, long mine life, high mineral sands prices and strong pick-up demand among key customers. in the United States, Europe and China.
Any future expansion of Coburn would be undertaken once commissioning and steady-state production have been successfully completed and the expansion work would have to be funded from project cash flow. The expansion would significantly leverage Coburn’s infrastructure, particularly the inherent design capability within the process plant circuitry.
Preliminary investigations highlight the potential capital and operating cost savings of the project extension, further strengthening Coburn’s already strong competitive position.
Construction at Coburn is over 65% complete and the project is on budget and on schedule to achieve first heavy mineral concentrate (HMC) production in the December 2022 quarter.
Coburn has an initial mine life of 22.5 years based on ore reserves currently compliant with the Joint Ore Reserves Committee, with the possibility of extending it beyond 2060 by converting mineral resources that exist at near and immediately to the north and along strike of the existing ore reserves.
Coburn’s potential expansion will be considered in conjunction with Strandline’s other strategic growth projects in Tanzania.