Nickel miners Western Areas and Panoramic Resources have announced capital raisings this morning in a bid to bolster their balance books as the price of the commodity continues to languish.
Western Areas flagged a $70 million raising, comprising a $60 million placement at a discounted $1.95 a share and a share purchase plan for retail shareholders to raise $10 million. Under the share purchase plan, shareholders will be able to subscribe for up to $15,000 worth of new shares also priced at $1.95.
Western Areas said the raising would strengthen its balance sheet and provide greater financial flexibility to fund growth initiatives.
“These initiatives include an accelerated and discounted payment of the remaining amounts due for the acquisition of the Cosmos Nickel Complex from Glencore of $12.6 million along with targeted exploration programs, project studies at Cosmos and the ability to re-start deferred discretionary capital projects at short notice when justified by nickel market conditions,” the company said.
Western Areas said it expected to have a net cash position of approximately $15 million (gross cash $40 million) at the end of the March quarter.
“Post the placement and following the Cosmos acquisition payment along with the full repayment of $25 million drawn this quarter from the company’s corporate debt facility, Western Areas will remain debt free with a strong cash balance of $61 million,” the company said.
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