ASX-listed Strandline Resources is lining up the final piece of the capital puzzle for its WA-based mineral sands project Coburn.

As first reported by Street Talk, Strandline and its brokers Shaw and Partners and Morgans were sounding out funds over the weekend for a $120 million-odd equity raising, expected to launch on Monday morning.

Fund manager sources said the deal would be structured as a placement and accelerated non renounceable entitlement offer, and fully underwritten by the two brokers at 20.5¢ a share. That price represented a 9 per cent discount to Strandline’s Friday close and a 4.5 per cent discount to the theoretical ex-rights price.

The $120 million equity raising is a chunky one for Strandline, about the same size as the company’s entire market capitalisation.

It’s the final bit of cash Strandline needs in the bank before making a final investment decision at Coburn.

The project sits about 240km north of established mineral sands export port Geraldton in Western Australia.

Strandline announced earlier this month that it had finalised the debt package for the project, thanks to securing a $US60 million bond issue, which would sit alongside a $150 million loan from the Commonwealth’s Northern Australia Infrastructure Facility.

The company’s definitive feasibility study for the mineral sands project said it would generate $104 million annual earnings before interest, tax, depreciation and amortisation and would take 18-months to go from the design/construction phase to ore processing.

The company already has offtake contracts with customers signed, construction contractors appointed and development approvals in place, and is targeting an initial 22.5-year mine life.

Article source: AFR, 29 March 2021