Independence to raise up to A$280m to strengthen balance sheet

JOHANNESBURG (miningweekly.com) – ASX-listed Independence Group (IGO) plans to raise up to A$280-million to strengthen its balance sheet and fund the remaining capital expenditure (capex) for its Nova base metals project, in Western Australia.

The equity raising comprises a A$250-million fully underwritten placement and an up to A$30-million non-underwritten share purchase plan.

IGO will issue about 66.7-million new IGO shares that are underwritten at a price of A$3.75 a share to raise the A$250-million.

It will also conduct a non-underwritten share purchase plan to facilitate retail shareholder participation of up to A$15 000 per eligible shareholder at A$3.75 a share, subject to an overall cap of A$30-million, or about eight-million shares.

“The equity raising will provide greater financial and operational flexibility for the business. Our world-class Nova project is 93% complete and remains on time and within budget and we look forward to first concentrate production in December.
 
“Despite IGO having sufficient headroom under its debt facilities to fund the remaining capital expenditure requirements at the Nova project, it is considered a prudent time to strengthen the balance sheet and reposition the company’s capital structure to increase financial flexibility,” IGO MD Peter Bradford said on Wednesday.

The equity raising provides funding for the A$140-million to A$150-million remaining development capex needed for the Nova project, reducing the need for further drawdown under the company’s existing debt facilities.

The equity raising will also provide additional funds for the payment of A$50-million to A$55-million of residual acquisition costs (stamp duty) payable in the second quarter of the 2017 financial year, funding for debt repayment and general corporate purposes.

Bradford added that the greater financial flexibility would also allow the company to progress other growth prospects across its portfolio, including the mill expansion study and resources extension projects at its 30%-owned Tropicana gold mine, the resource extension at its 100%-owned Jaguar base metals operation and broader exploration initiatives surrounding its other existing operational assets.

JUNE QUARTER PERFORMANCE
IGO on Wednesday reported that its attributable gold production for the quarter ended June 30 reached 28 540 oz, while its attributable share of gold sold was 29 254 oz.

The Tropicana gold mine, a joint venture with AngloGold Ashanti, produced 95 133 oz of gold on a 100% basis in the June quarter, taking production for the 2016 financial year to 448 116 oz.

IGO’s Long mine, in Kalgoorlie, produced 2 018 t of contained nickel in the June quarter, taking output for the financial year to 8 493 t.

Its Jaguar mine, also in Kalgoorlie, produced 8 937 t of contained zinc and 3 235 t of contained copper in the June quarter. Contained zinc production for the full year reached 39 335 t and contained copper production 7 412 t.

IGO recorded a A$16.4-million profit for the June quarter, but a loss of A$58.9-million for the full year.