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Bridget Carter

29Metals hits the jackpot with big shareholders

Bridget Carter
A view over the Capricorn copper mine about 125km north of Mount Isa.
A view over the Capricorn copper mine about 125km north of Mount Isa.

29Metals’ $151m raising through Macquarie Capital and Jarden was larger than expected, but all of its largest shareholders have taken up their rights.

The raise on Wednesday at 69c, an 8 per cent discount to the last closing price of 75c, has been expected by analysts since at least May, as the company needs funds after flooding at its Capricorn Copper mine in North Queensland.

The question being asked around the market was why did the raise not occur earlier.

The funds are being used to strengthen 29Metals’ financial position, fully fund the Capricorn Copper recovery plan and near-term Golden Grove capital projects.

Sources said while the raise was large, 29Metals’ result on Wednesday showed it was not generating a lot of cash, adding that much of the funds will go towards Capricorn.

29Metals, which produces mostly zinc but also copper, is 45 per cent owned by private equity firm EMR Capital, which also took up its entitlement in the raise, amounting to $67.8m of new shares.

29Metals will have $31m of net cash after the raise, wiping out its $120m net debt position.

It has also received key covenant relief from lenders through to December 2024 to support the Capricorn recovery.

The company posted a $307m loss for the six months to June, with the result impacted by the wet weather that washed out the Capricorn Copper operations during the March quarter for an extended period.

Bridget Carter
Bridget CarterDataRoom Editor

Bridget Carter has worked as a writer and editor for The Australian’s DataRoom column since it was launched in 2013, focusing on capital markets, mergers and acquisitions, private equity and investment banking. She has been a journalist for more than 18 years, covering a broad range of events and topics, including high profile court cases and crimes, natural disasters, social issues and company news.

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Original URL: https://www.theaustralian.com.au/business/dataroom/29metals-hits-the-jackpot-with-big-shareholders/news-story/47f3f33ef22ed3c35ef4ade7ae9a4718