Monsters of Rock: Embattled Nickel Mines cancels share purchase plan

A beleaguered Nickel Mines (ASX:NIC) has move to withdraw its share purchase plan that was originally intended to raise US$13m ($17.7m) but received applications received totalling about $57m.

This was originally intended to allow existing shareholders to participate in the capital raising announced in February to fund the acquisition of a 70% stake in the Oracle nickel project.

However, market volatility and the plummeting in the company’s share price led the company’s directors to cancel the SPP as it was no longer in the best interests of shareholders.

NIC managing director Justin Werner said proceeds from the SPP were not required for the Oracle acquisition and that all monies received would be returned.

The stock has lost 27% of its value over the past week amid investor concerns about its ties with under fire Chinese nickel giant Tsingshan, which has emerged as the probable victim of the short squeeze that ‘broke’ the nickel market.

Tsingshan is the offtake partner and a minority owner in Nickel Mines’ Indonesia nickel pig iron plants, as well as the owner of 18.7% of NIC’s ASX-listed stock. NIC said that Tsingshan had assured the company that it had no plans to sell down its shareholding.

NIC managing director Justin Werner said proceeds from the SPP were not required for the Oracle acquisition and that all monies received would be returned.

Copper miner 29 Metals (ASX:29M) updated its combined resources to 123.4 million tonnes containing 2.1Mt of copper, 1.3Moz of gold, 2.6Mt zinc and 75Moz of silver. That includes depletion of 4.7Mt, mostly offset by resource additions totalling 4.1Mt.

A large part of this was due to a doubling of resources at the Cervantes deposit within its Golden Grove project in WA to 4.6Mt at 1.4% copper, 6.6% zinc, 0.7g/t gold and 40g/t silver.

Over at the Capricorn Copper mine in Queensland, mining and processing volumes and “an expansion of non-recoverable material” reduced resources by 2.7Mt, partially offset by a 0.9Mt resources increase.

No material changes were made to resources at the Redhill project in Chile though 29 Metals flagged that it will carry out further field work and assessment in 2022 to estimate the potential size of the mineralised system.

This could be timely given Macquarie’s warning that there would be sufficient copper in the pipeline to meet demand if sufficient new projects are approved in the next few years. Coincidentally, it added that the largest growth in supply is expected to come from Chile.

On the ore reserves front, 29 Metals’ production led to it falling from 27.8Mt containing 481,000t of copper, 433,000oz of gold, 804,000t of zinc and 21.28Moz of silver to 25.3Mt containing 456,000t of copper, 334,000oz of gold, 655,000t of zinc and 17.4Moz of silver.