Australian mining company True North Copper has secured commitments to raise A$50.3m ($32.7m) in equity through a fully underwritten conditional placement, subject to shareholder approval.
The placement involves issuing approximately 10.06 billion new shares at A$0.005 each.
The conditional placement, set at an 83.3% discount to the last close price, has garnered significant support from institutional and sophisticated investors including the company's largest shareholders and processing partner Glencore, which will become an approximately 9.9% shareholder post-recapitalisation.
Other key stakeholders Tembo Capital Holdings and Regal Partners provided A$15m and A$6m, respectively.
The equity raise will fund True North's revised business strategy, focusing on exploration and evaluation activities, particularly at the Cloncurry Copper Project and Mt Oxide Project in Queensland.
This move forms part of a comprehensive recapitalisation strategy, which includes extinguishing all company debt, restructuring key agreements, and funding for a revised exploration and resource definition drilling strategy.
The company also plans to offer an additional A$5m share purchase plan to eligible shareholders at the same offer price.
Canaccord Genuity and Morgans Financial acted as joint lead managers for the placement.
Upon completion, the recapitalisation will settle secured creditor debts of approximately A$32.3m owed to Nebari, which has agreed to a debt-to-equity conversion and a six-month voluntary escrow on these shares.
Unsecured creditors will be partially repaid with A$1.4m in cash and A$500m in new shares. The company's off-take and tolling agreements, particularly with Glencore, will also be redefined.
True North managing director Bevan Jones said: “The successful completion of the fully underwritten A$50.3m 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. 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. The recapitalisation process has given us the opportunity to revise the company’s direction and set it on a revitalised path. We have recently completed extensive surface mapping at Mt Oxide, including rock chip sampling and a very successful GIS [Geographic Information System] IP survey.”
