29Metals Limited (ASX:29M) Completes $180M Equity Raising
29Metals Limited (ASX:29M) has embarked on a significant $180 million equity raising aimed at refinancing its senior debt and financing the development of its Gossan Valley project. The funding, through a fully underwritten institutional placement and an accelerated pro-rata non-renounceable entitlement offer, signifies the company’s strategic move to enhance its financial stability and support its growth initiatives.
Equity Raising Details
The equity raising comprises an institutional placement and an entitlement offer. Under the plan, existing shareholders are offered the opportunity to purchase new shares at a price of $0.27 per share, representing a substantial discount of 16% to the theoretical ex-rights price. Major shareholders AustralianSuper Pty Ltd and BUMA have committed to fully participating in the entitlement offer and subscribe for up to $40 million and $62 million respectively.
Debt Refinancing and Future Outlook
The equity raising will facilitate a $28 million reduction in total senior debt and extend the maturity of existing senior facilities to 2028. It also supports the development of Gossan Valley, with the goal of commencing ore production expected in the second half of 2026. CEO of 29Metals, Mr. Jason Holst, stated, “This equity raising positions 29Metals to effectively manage its debt and pave the way for long-term growth, particularly through the Gossan Valley project.”
Funding Use and Financial Metrics
Proceeds from the capital raise will be allocated to various objectives: $112 million will fund the Gossan Valley project through to first ore, and approximately $40 million will be dedicated to water reduction initiatives and general working capital at Capricorn Copper. With an estimated unlevered pre-tax net present value of $110 million at a discount rate of 9%, the Gossan Valley project demonstrates strong potential for value creation.
Following the execution of this equity raising, 29Metals aims to strategically enhance its operational efficiency and strive for production growth while maintaining robust financial health.
Motley Fool contributor Kiarra Jackson has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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