The 45 per cent shareholder of 29Metals, EMR Capital, has opted out of participating in its latest $180m equity raising.
The copper miner on Tuesday offered shares at 27c each through advisers at Macquarie Capital and Jarden, a 27 per cent discount to the last closing price of 37c, announcing the terms after DataRoom flagged private equity firm EMR would not participate.
29 Metals has struggled with flooding at its Capricorn Copper project in Queensland and disappointing production and said the funds were being used to pay down US$18m of debt and refinance, fund its Gossan Valley development to first ore and reduce water at Capricorn Copper.
It would secure $47m of the funds through a placement and the rest through an entitlement offer. AustralianSuper’s share would move to 18 per cent and. BUMA would hold 19.9 per cent after the raise after taking up their rights to participate in the offer.
29Metals listed at $2 a share in 2021 and its market value is now $260m.
There had been speculation that the private equity firm EMR Capital had been keen to sell out of the company and had tested buyer interest.
DataRoom reported in October another raising was on the cards after it tapped the market last year through Macquarie and Jarden.
29Metals also owns the Golden Grove copper and gold mine in Western Australia.
Analysts at Jarden had forecast a cash balance of $30m at December, assuming all loans are full drawn, and they said they remained of the view that additional funds were needed.
They pointed out that its cash balance had reduced to about $60m, from $85m at June, and its liquidity had fallen to about $104m, from about $130m, as net debt increased to $147m.
The 29Metals Glencore offtake finance facility was drawn by a further $US20m post quarter end, and it expected the remaining $US10m to be drawn in the current quarter.
In August last year, the company raised $151m at 69c a share, an 8 per cent discount to the last closing share price of 75c.
Spartan Resources
Meanwhile, Ramelius Resources is believed to be participating in the Spartan Resources equity raising, fuelling further speculation it remains keen for a buyout.
The move will take its interest in the company to 19.9 per cent, say sources.
Spartan entered a trading halt on Tuesday as it taps the market for $220m by way of a placement at $1.32 per share through Canaccord.
The price is a 7 per cent discount to its last closing price and the funds will be used for activities including its underground mine development and general exploration.
Ramelius purchased 8.9 per cent of Spartan Resources in June and the two gold miners have assets close by.
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