Metro Mining set to raise $52M for Bauxite Hills Mine

Metro Mining Limited has launched a $52.4 million equity raising to advance its Bauxite Hills Mine 95 km north of Weipa. The company also plans to repay loan facilities that supported its recent acquisition of neighbouring Gulf Alumina Ltd (December last year.)

The Gulf takeover resulted in Metro doubling its Direct Shipping Ore Reserve to 96.5 million tonnes. It also gained vital infrastructure including airstrip, haul roads and a port site on the Skardon River.

The $52.4 million equity raising will involve the issue of approximately 419.4 million fully paid ordinary shares at $0.125 per share with a placement of approximately 126.9 million New Shares to institutional and sophisticated investors to raise up to $15.9 million. A one for two pro-rata non-renounceable entitlement offer of approximately 292.3 million New Shares is expected to raise approximately $36.5 million.

The Issue Price represents a 19.4% discount to the last traded price of Metro shares on 23 February.

Metro Mining Managing Director Simon Finnis says, in addition to contributing to full repayment of loans related to the Gulf acquisition, the funds would be used to make commitments to purchase long lead time items, finalise environmental approvals and provide bonds, carry out grade control drilling, and complete the Bankable Feasibility Study.

“We are delighted to introduce new institutional investors to the company while providing existing shareholders the opportunity to invest further,” Mr Finnis 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.”

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Argonaut is acting as sole lead manager to the Institutional Placement and underwriter for the Entitlement Offer. The Equity Raising will be significantly supported by Metro’s long-term cornerstone shareholder Balanced Property which is expected to invest a further $16.0 million. Strategic investor Greenstone also has anti-dilution rights to maintain its 19.6% interest.

Metro is currently preparing a Bankable Feasibility Study due to be released within weeks. Project construction on-track to commence H2 2017.