PERTH (miningweekly.com) – Mineral sands developer Sheffield Resources has announced a A$30-million capital raise as it looks to expand its project portfolio to include the South Atlantic mineral sands project, in Brazil.

The company has taken an option to acquire an initial 20% interest in the South Atlantic project from tenement holder RGM. Under the terms of the option agreement, Sheffield will provide RGM with an unsecured loan of $2.5-million to fund project-related activities and assist Sheffield with further project-related due diligence.

The option is exercisable within 18 months and could be exercised with the payment of a further $12.5-million.

To fund the potential acquisition, Sheffield on Tuesday announced a capital raise, saying it had received binding commitments for the placement of 36-million new shares, priced at 50c each, to raise an initial A$18-million. The placement will be completed under Sheffield’s existing placement capacity and will not require shareholder approval.

Additionally, Sheffield will also undertake a 1-for-14 pro rata non-renounceable entitlement offer, also priced at 50c a share, to raise a further A$12-million.

The offer price represents a 16% discount to Sheffield’s last closing price and a 16.7% discount to the company’s 15-day volume weighted average share price.

“With Thunderbird Stage 1 over 75% complete, on time for first customer delivery in the first quarter of 2024, and with the expected cost to complete fully funded from existing KMS debt and equity, Sheffield is pleased to make the next step in its strategy to assemble a portfolio of mineral sands developing and producing assets,” said executive chairperson Bruce Griffin.

“Over recent months, following the Thunderbird mineral sands project's final investment decision, we initiated a review of potential business development opportunities to diversify our asset portfolio, and we believe the South Atlantic mineral sands project in Brazil presents a significant opportunity to increase Sheffield shareholder value.”

“We are extremely pleased with the level of support shown by existing and new investors in respect of the placement. This equity raising allows Sheffield to maintain a sound financial position as we progress our new mineral sands business opportunity in Brazil and support future growth at KMS,” he added.