Cyprium Metals raises $35m to help fund Nifty copper project restart

Cyprium Metals (ASX: CYM) has received firm commitments for a $35 million capital raising to fund the restart of the Nifty copper project in Western Australia.

The raising will be conducted through a two-tranche placement of 318.6 million fully paid ordinary shares to sophisticated and institutional investors at $0.11 per share.

The issue price represents an 18.5% discount to the last closing price of $0.13 on 31 January.

Tranche 1 will be for 182.5 million shares, while Tranche 2 will issue 136.08 million shares and 336.13 million options, which includes 17.5 million options to be issued to the joint lead managers and financial advisor.

Each participant will receive one free attaching option for every share issued, with a two-year term and an exercise price of $0.15.

Settlement of Tranche 1 will occur before month-end, and is conditional upon receipt of binding commitments relating to a senior secured bond issue with international debt capital market investors.

Cyprium will seek quotation for the options, which will be subject to meeting certain listing requirements.

The placement was strongly supported by numerous sophisticated and professional investors, including new and existing domestic and offshore institutions.

The placement was jointly managed by Canaccord Genuity (Australia), Euroz Hartleys and Evolution Capital.

Longreach Capital acted as financial adviser.

Finance package

Managing director Barry Cahill said commitments received would form part of the finance package for the Nifty project restart.

“The completion of this capital raising will allow us to commence our construction plans and the production of copper metal plate on site in the first half of next year,” he said.

“The restart project economics remain very robust and are further enhanced based on the current copper price of $13,000 per tonne which is above those applied in the restart study.”

Mr Cahill said $20 million of the placement proceeds would be applied as part of the company’s funding strategy to finance the restart which will aim to provide a sustainable, secure and stable supply of copper metal at 25,000t per annum.

The remaining funds will go towards exploration activities, resource drilling, capital raising costs, financing costs and general working capital.

Senior secured bond

Last month, Cyprium commenced fixed income investor calls with international debt capital market investors as part of the total Nifty funding package.

The company expects to be issued with a US dollar senior secured bond with a five-year tenor, subject to inter alia market conditions.

Net proceeds from the bond issue together with a US$35 million offtake prepayment facility secured in December will comprise the targeted A$260 million debt funding package to finance the project’s restart.