29Metals is not set to pull the trigger on an equity raising on Tuesday when it updates the market, despite expectations the copper miner could have been about to tap the market for cash.
Many in the market had been betting that an equity raising could be afoot after challenges faced by 29Metals.
Wet weather in Queensland in the March quarter washed out 29 Metals’ Capricorn copper operations for an extended period.
The market value of 29Metals has fallen sharply as a result, currently at about $509m.
At the recent Macquarie Australia conference, it told investors that it had net debt of $34m and a $US40m undrawn revolving capital facility.
Market observers say that at some stage, 29Metals may need some additional cash for the rehabilitation phase of the mine, which would take some time to return to production and had taken a year of earnings out of the operation.
29Metals said at the start of this month that the Capricorn Copper recovery would be in two phases. Operations would be partially reinstated by the middle of the September quarter this year, with a combination of ore mined from the Mammoth and Greenstone ore sources and stockpiles, and there would be complete reinstatement in the middle of the first half of next year. At that time, it said it would provide a further update mid-May.
Compounding the challenges for copper miners is that the copper and zinc prices remain subdued.
The Wall Street Journal has reported that a sputtering recovery in China has dragged copper prices to a five-month low, delaying one of the most widely anticipated bull runs in commodity markets.
Copper’s benchmark futures contract closed Friday at $US8,272 a metric tonne, down 6.9 per cent over the past month.
Copper is a key material for home-building and electronics, and its price is often looked to as a barometer of economic health.
Its rally early this year was fuelled by expectations that China – the world’s largest consumer of commodities – would see a manufacturing and construction boom after the country abandoned its zero-Covid policy.
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