True North Copper Breathes New Life Into Cloncurry Copper Mine With Capital Raising

True North Copper (ASX: TNC) will raise $24.3 million in equity via a fully underwritten placement and entitlement offer to restart mining operations at Cloncurry in northwest Queensland.

TNC acquired the Great Australia Mine, which is now called the Cloncurry copper project, off Round Oak Minerals.

It has been in care and maintenance since 2018/19.

For long-term shareholders, the deal will be welcome news as the share price has languished for some time.

The capital raisings are pitched at $0.056 per share, representing a 25% discount to the last closing price of $0.075 per share.

Binding offtake and toll milling agreements are in place with global commodity trader Glencore.

Copper sulphate production is underway from existing stockpiled ore.

Allowing a fast restart to production is the existing infrastructure at the Great Australia Mine.

This includes an oxide heap leach and solvent extraction plant, mining/support facilities, and existing power.

Strong cash position

TNC will have unrestricted cash of $27.4m post equity raising and total liquidity of $42.6m, including the undrawn major shareholder Nebari debt.

Net cash position after the raising will be $13.2m.

While the EV/Resource is forecast at a useful $134/t.

Mining Metrics

  • Mining 4.8Mt over initial 4.6-year life.
  • Producing 28.7kt Cu and 20.9kz Au.
  • 90% copper concentrate revenue over LoM.
  • Sulphide material is processed under a tolling agreement at Ernest Henry.
  • Exploration upside exists to increase the mine life.
  • The AISC is A$3.59/lb.

The project post-raising is replete with a strong base case given soaring copper spot prices. The NPV is A$163m, the Project Cash Flow is A$200m, and the IRR an astonishing 716%.

Finally, payback is FY25.

TNC is forecast to be cash flow positive within 12 months.

 

 

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