Metro Mining signals potential capital injection, halts trading activity

On April 30, 2024, Australia's leading bauxite miner, Metro Mining initiated a trading halt in anticipation of an imminent announcement regarding capital raising. With a market capitalisation of $222.73 million, the company has stated that the halt will persist until May 2, 2024, or until the disclosure is made public.

Metro Mining is raising $44 million, with Shaw and Partners serving as the exclusive lead manager and book-runner, as per the Australian Financial Review's (AFR) Street Talk column.

According to the AFR, the placement is strategically anticipated to be valued at $0.041 per share, reflecting an 11 per cent markdown from the latest closing trading price and an 8 per cent reduction from the 5-day volume weighted average price.

The funds generated will be allocated towards restructuring the company's junior debt profile, facilitating the expedited refinancing of its senior debt, and bolstering operational advancements.

Metro Mining has initiated a trading halt before participating in the RIU Sydney Resources Round-up, scheduled for 7-9 May 2024 at Darling Harbour's Hyatt Regency Hotel.

In its most recent quarterly report, Metro confirmed the completion of preparations for its expansion project and the acquisition of all necessary regulatory approvals for its offshore floating terminal (OFT), Ikamba. This development allows for its operational launch in Australia, coinciding with a notable surge in the bauxite market.

Metro notes a significant 39 per cent increase in the Australian bauxite price since January 2022. As announced earlier, Ikamba commenced operations on 28 April 2024, marking a pivotal step in Metro's expansion plans towards achieving a 7-million-tonnes annual capacity.

Simon Wensley, the Managing Director, and CEO of Metro Mining, said, "Despite very challenging weather, it was excellent to see a safe and productive off-season maintenance and project expansion program executed during the quarter, leading to an earlier production commencement than 2023 and the operation of OFT Ikamba by the date of this release.”

The construction of the wobbler screening plant has been completed, emphasising safety and environmental compliance. Metro Mining reports zero injuries or incidents up to the end of the first quarter of 2024. Electrical connections are being established, testing is underway, and progressive commissioning is scheduled for the second week of May 2024.

Meanwhile, screening operations are being maintained using the existing screen circuit and a mobile scalping unit, ensuring sufficient rates to meet the company's objectives. Based in Queensland, Australia, Metro Mining primarily focuses on its flagship Bauxite Hills Mine in Cape York, north Queensland.

According to its latest quarterly report, as of March 31, 2024, the company held $2.77 million in cash and cash equivalents. The RIU Sydney Resources Round-up, held last year, saw a significant turnout, with more than 1,500 delegates attending, marking it as the busiest since its establishment in 2004. Notably, over 800 of these delegates were from investor, broker, or fund categories, indicating substantial opportunities for investor engagement at this conference.