Strandline capitalising on strong mineral sands market

Strandline Resources has raised A$50 million in a strongly supported placement to institutional, professional and sophisticated investors (reports MiningNews).

About 116.3 million new shares will be issued at 43c each, a 3.6% discount to the 10-day volume-weighted average price.

Shaw and Partners and Morgans Corporate acted as joint lead managers and bookrunners to the placement with Euroz Hartleys acting as co-lead manager.

"The strong demand for the placement, led by institutional investors, reflected the quality of Strandline's mineral sands growth portfolio and enables the company to capitalise further on the growing global demand for critical minerals products," Strandline managing director Luke Graham said.

The proceeds will be used primarily to fund the near-term development of Strandline's US$35 million Fungoni mineral sands project in Tanzania, which will be Strandline's second operation after the Coburn development in Western Australia, which is more than 65% built.

Strandline is accelerating Fungoni in light of the increase in mineral sands prices.

The company is completing a review of the definitive feasibility study to incorporate updated pricing and will also review the $26 million project finance facility agreement signed with Nedbank CIB in 2020.

The funds will also be used to complete a feasibility study and advance approvals for the large-scale Tajiri mineral sands project in Tanzania and the potential future expansion at Coburn.

Earlier this week, Strandline announced it had launched a scoping study to evaluate the potential to increase the planned production rate by up to 50% at Coburn.

Development of the A$260 million project is rapidly advancing with pre-production mining works set to start several months early.

First production is due in the December quarter.

The company plans to fund any expansion of Coburn from cashflow.

The December 2020 Coburn DFS forecast average annual EBITDA of $104 million over the 22.5-year mine life, though mineral sands prices have increased by at least 35% since then.

Last month Euroz Hartleys initiated coverage of Strandline with a speculative buy rating and 74c price target.

Upcoming Events

17th February 2022
Investor Webinar: Gateway Mining
Gateway Mining (ASX: GML) Managing Director Mark Cossom will discuss recennt highlights from the Company's Gedgee Gold Project in Western Australia and its exploration strategy for 2022.