Mincor raises $60m to 'supercharge' nickel production

There aren't many options when it comes to large cap, pure play nickel options on the ASX. We used to have Western Areas (ASX: WSA) but that was acquired by IGO (ASX: IGO) in June 2022.

Mincor (ASX: MCR) is a nickel producer that's advancing towards full-scale production alongside a pipeline of greenfield targets. It's trying to return to the $1bn market cap club after falling around -11% year-to-date.

Mincor aside, there's also the +$2bn giants Nickel Industries (ASX: NIC) and Chalice Mining (ASX: CHN), the latter is not yet a producer.

Equity raise to 'supercharge' growth

Mincor is seeking to raise $55m and an additional $5m via a share purchase plan to accelerate the development of its Golden Mine and drilling activity at the Cassini prospect.

The raise will be held at $1.39 per share or a 12.3% discount to the stock's last close.

Minor was a dormant producer up until May 2022, where it reached an offtake purchase agreement with BHP's Nickel West. Now its in the process of ramping up production at its Kambalda Nickel Operations. In October, Mincor guided to FY23 production of 8,000 to 10,000 tonnes of nickel concentrate and expects to exit the year at nameplate mining rates.

The proceeds of the capital raising will be used to accelerate Mincor's growth pipeline: The Golden Mine and Cassini prospects.

Golden Mine: Bolster Kambalda growth prospects

Golden Mine is situated within the Kambalda Nickel Project and delivered an initial ore reserve in late October. Mincor intends to allocate $20m of the proceeds to expedite drilling and development works.

Mincor said "there is outstanding potential to discover additional nickel mineralisation within the Golden Mile, with the potential to significantly extend the mine life of its Kambalda Nickel Operations."

Cassini: An emerging nickel sulphide operation

Mincor intends to allocate up to $15m to accelerate the underground exploration and resource definition program at Cassini. The timeline will also be pushed forward from late FY23 to late January 2023.

Cassini is an ore-producing deposit that's currently ramping up production as part of the company's greater Northern Operations.

When trading resumes

Mincor expects to resume trading on Tuesday, 13 December.

The placement is equivalent to approximately 8% of shares on issue at a 12.3% discount. So its a relatively ordinary raise.

It will be interesting to see if Mincor shares open -12% lower on Tuesday to reflect the discount. Or if the raise is well-supported and the stock holds up relatively well.