PERTH (miningweekly.com) – ASX-listed 29Metals has launched a A$151-million entitlement offer to fully fund the Capricorn Copper recovery plan and near-term capital projects at Golden Grove.

The equity raise will be undertaken through a 1-for-2.2 accelerated non-renounceable entitlement offer priced at 69c a share. 29Metals is expected to issue 219.1-million shares, representing around 45.5% of the current issued capital.

The offer price represents an 8% discount to the company’s last closing price.

“The equity raising announced today will enable the company to fund the Capricorn Copper recovery plan and also provide a platform for the company to complete key growth initiatives,” said MD and CEO Peter Albert.

“We are pleased that the Capricorn Copper recovery plan continues to progress, with the restart of operations at Mammoth and Greenstone earlier this month a key milestone for the company, with dewatering and rehabilitation expected to enable targeted full recovery of operations by the middle of the first half of 2024. In the near term, the company is focused on current water reduction measures as well as addressing tailings storage solutions to support operations.”

The company last month launched Phase 1 of the restart operations, which saw the restart of mining activities at the Mammoth and Greenstone deposits.

Phase 2 of the restart strategy will focus on the Esperanza South operation, with dewatering and rehabilitation efforts at the mine to be undertaken during Phase 1 to enable full recovery operations during Phase 2.

“In the medium term, the company intends to deliver on the tremendous exploration potential at existing orebodies, Mammoth and Esperanza South, as well as the approximately 1 900 km² tenement area surrounding the mine site,” said Albert.

“At Golden Grove, the equity raising will allow the company to continue the ramp-up of the high-grade Xantho Extended orebody and positions us well to deliver long-term growth from the development of Gossan Valley which will provide an independent production front from 2026, as well as potentially Cervantes, where conversion drilling is ongoing.”

Meanwhile, the company on Wednesday also released its financial results for the six months ended June, marking a net loss after tax of A$306.6-million, from a net profit after tax of A$390 000 in the previous corresponding period.

“29Metals’ first half 2023 financial result was significantly impacted by the extreme weather event that resulted in Capricorn Copper’s operations being suspended. This includes loss of revenues, increased costs associated with recovery efforts and non-cash accounting impairment charges at Capricorn Copper,” said Albert.

29Metals reported a non-cash impairment charge of A$206-million relating to the Capricorn Copper project following the severe weather event which halted mining activities in early March.

As a result, copper production declined from 20 500 t to 10 000 t during the interim period, while zinc production was down from 23 000 t to 22 100 t.

The miner reported revenues of A$235-million, down from the A$356.3-million in the previous corresponding period, with earnings before interest, taxes, depreciation and amortisation falling from A$94.3-million to a loss of A$271-mllion.

“Looking ahead, we remain focussed on executing our plans to deliver positive improvements for both operations in the second half. We continue to progress the Capricorn Copper phased restart of operations, improving development rates at the high-grade Xantho Extended orebody at Golden Grove, completing ventilation upgrades, progressing regulatory approvals, while maintaining cost management and capital discipline,” said Albert.

“Whilst today’s result is not what we hoped for, we are confident that the progress made in the first half, under extremely challenging circumstances, sets the company on the path to delivering its potential.”