True North Copper has received firm commitments to raise $50.3 million to fund its revised exploration and resource definition drilling strategy.
The conditional placement is part of True North’s broader recapitalisation to extinguish all debt and will see approximately 10.06 billion new fully paid ordinary shares issued at a price of $0.005 per new share.
The offer price represents a discount of 83.3 per cent to the last close price of $0.03 per share on October 14, with the placement to be completed in a single tranche.
The placement also includes a $300,000 drill-for-equity for diamond drilling services at the Mt Oxide project in Queensland.
Thus far, the placement has received $15 million from Tembo Capital Holdings, which is True North’s largest shareholder, and $6 million from Regal Partners, which is True North’s second largest shareholder.
Glencore Australia is also set to become a True North shareholder with an approximate 9.9 per cent stake on a pro forma basis.
The placement’s funds will be used to convert the approximate $3.9 million debt owed to Nebari Natural Resources Credit Fund II via a debt-to-equity conversion.
True North also plans to offer eligible shareholders the opportunity to participate in a share purchase plan to raise up to a further $5 million at the same offer price as the conditional placement.
True North said once the placement, equity raising and recapitalisation has been completed, it will be debt free with a robust balance sheet to fund its revised business strategy focused on definition drilling at the Cloncurry copper project in Queensland and the extensive exploration program at the Mt Oxide project in Western Australia.
“The successful completion of the fully underwritten $50.3 million conditional placement to recapitalise True North is a great outcome and a testament to the strength of the company’s outlook and highly prospective portfolio of copper assets,” True North managing director Bevan Jones said.
“With a strong cash position, zero debt and a new experienced board and leadership team, we now have the opportunity to refocus our strategy and explore growth opportunities.
“The new True North strategy is to pause, drill and optimise our existing highly prospective lease package.”
True North won’t carry out any work consistent with ramping up to or maintaining production at any of its processing facilities during the next 12 months as part of its new strategy.
“The recapitalisation process has given us the opportunity to revise the company’s direction and set it on a revitalised path,” Jones said.
“At Cloncurry we have paused mining and have moved into a low-cost base while we rethink the original, small scale starter pit strategy.
“Surface exploration has identified multiple new targets at our Cloncurry copper project. Geophysical surveys have produced potential mine-scale-changing targets within our current mining leases. Exploration around our Wallace North lease package has also led to potential underground extensions to the ore body.
“We look forward to undertaking our extensive drilling programs at Cloncurry and Mt Oxide, commencing in Q1 2025 (the first quarter of 2025.”
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