Nickel miners to raise $81m

Western Areas and Panoramic Resources have announced plans to raise a combined $80.7 million from investors to continue work at their respective nickel operations in Western Australia.

Western Areas has launched a fully underwritten placement to raise $60 million from investors, through the issue of 30.8 million shares at $1.95 each.

The price represents a 9.7 per cent discount to the company’s closing price yesterday.

Western Areas also plans to conduct a non-underwritten share purchase plan at the same price as the placement to raise a further $10 million.

The placement was fully underwritten by Morgan Stanley Wealth Management and Macquarie Capital.

Western Areas plans to use the proceeds of the raising to cover a remaining $12.6 million cost of acquiring the Cosmos nickel project from Glencore, along with the full repayment of a $25 million debt facility with ANZ Banking Group and for general working capital.

Managing director Dan Lougher said the raising would provide greater balance sheet flexibility while nickel prices remain depressed, and allow the business to take advantage of growth opportunities.

“The equity raising also provides us with the ability to accelerate the remaining payments for Cosmos at a reduced price,” Mr Lougher said.

Post-raising, the company expects to remain debt-free with a cash balance of $61 million.

Meanwhile, Panoramic has announced a one-for-three entitlement offer to raise $10.7 million.

The raising was priced at 10 cents per share, representing a 16.7 per cent discount to the company’s closing price yesterday.

The raising has been fully underwritten by Zeta Resources and GMP Securities, with Zeta underwriting $9 million while GMP intends to appoint sub-underwriters for the $1.7 million it has agreed to underwrite.

If Zeta takes up its full entitlements, it will end up with a 35.5 per cent stake in Panoramic.

Panoramic plans to use the funds from the raising to complete a feasibility study on, and undertake more exploration on, its Savannah North nickel project, and to cover costs associated with the mothballing of its Savannah project.

“Funds raised from the offer will be used to upgrade and extend the drilling coverage at Savannah North with a focus on extending the known resource and conceptual mine life,” the company said in a statement.

“The balance of funds will be used on otter nickel exploration targets, offer costs and general working capital purposes.”

Shares in Western Areas were unchanged at $2.16 each, while Panoramic shares fell 10.8 per cent to 10.7 cents each at 10:15am.