Nickel and gold miner, Independence Group (IGO) yesterday kicked off a $250 million raising from institutional investors to strengthen its balance sheet and provide another $150 million for its Nova project in WA.
The issue will be made at $3.75 a share, an 8.1% discount to the last closing price of $4.08 on Tuesday and a 6.9% discount to the five-day value-weighted average price of $4.03.
The miner and explorer said that the equity raising was to “strengthen its balance sheet and to provide greater financial flexibility to fund growth initiatives”, and specifically to provide around $150 million for its Nova Project.
“The Equity Raising will provide greater financial and operational flexibility for the business,”IGO managing director Peter Bradford said.”“The Equity Raising will provide greater financial and operational flexibility for the business. Our world-class Nova Project is 93% complete and remains on time and within budget, and we look forward to first concentrate production in December 2016.”
"As announced to the ASX on 21 July 2016, IGO continues to assess opportunities to unlock additional value from the Nova Project as its construction and development nears completion. This is evidenced by the acceleration of development of the Bollinger orebody as a result of further optimisation of the Nova mine plan.
“Early access to the orebody is expected to deliver enhanced early cash flow and additional project value while staying on schedule and within the original initial capital cost estimate of A$443 million,” Mr Bradford said.
“Despite IGO having sufficient headroom under its debt facilities to fund the remaining capital expenditure requirements at the Nova Project, it is considered a prudent time to strengthen the balance sheet and reposition the Company’s capital structure to increase financial flexibility.”
“Greater financial flexibility will also allow IGO to comfortably progress other growth prospects across the portfolio including the mill expansion study and resources extension projects at Tropicana, resource extension at Jaguar and broader exploration initiatives surrounding IGO’s existing operational assets,” he added.
It will also provide additional funds for the payment of residual acquisition costs (stamp duty), funding for debt repayment and general corporate purposes including working capital.
"Our Nova Project is 93 per cent complete and remains on time and within budget, and we look forward to first concentrate production in December 2016."
The raising is expected to be finished by the end of this week.
The company also plans to conduct a non-underwritten Share Purchase Plan to allow retail shareholder participation of up to $15,000 for each eligible shareholder at the Placement Price, subject to an overall cap of A$30 million (or approximately 8 million shares). Independent operates in two segments: mining and mineral exploration. The company’s wholly owned subsidiary, Lightning Nickel Pty, operates the Long Nickel Mine located at Kambalda in Western Australia.
Independence Group’s nickel projects include Duketon Joint Venture, Wiluna Joint Venture, Ravensthorpe Joint Venture, Lefroy Joint Ventures, Storbodsund Joint Venture, Musgrave BHP Billiton Joint Venture and Mt Isdell.
The Company’s gold projects include Tropicana Joint Venture, Dalwallinu, Coomberdale-Gold, Holleton, Cobar and Empress Springs.
