New Century raises $53m to bring massive zinc mine back from the grave
New Century Resources is on track to become a globally significant zinc producer in 2018, raising almost $53 million to get the mothballed Century zinc mine back up and running.
The equity raising will take place through the issue of 44 million new shares at $1.20 per share to institutional and sophisticated investors. The offer price represents a 10.4 per cent discount to New Century’s closing price of $1.34 on November 2.
New Century (ASX:NCZ) will kick off with reprocessing of tailings and a restart feasibility study.
Tailings are byproducts left over from previous mining and extracting of resources. Tailings can include finely ground rock particles or chemicals.
The study is due to be completed this month.
Last month, New Century took ownership of Century after buying the remaining 30 per cent stake in the mine through its purchase of private company Century Bull.
Century lies 25km north-west of Mount Isa in the Lower Gulf of Carpentaria.
The mine began open-pit production in 1999.
During its 16 years of operation, Century was one of the biggest zinc mines in the world, producing and processing an annual average of 475,00 tonnes of zinc concentrate and 50,000 tonnes of lead concentrates at Lawn Hill.
The product was transferred in slurry form via a 304km underground pipeline to Century’s Port facility at Karumba for shipping to smelters in Australia, Europe and Asia.
The mine closed last year but still hosts at least 2.6 million tonnes of zinc, 700,000 tonnes of lead and 42.5 million ounces of silver.
New Century last traded at $1.34 prior to a trading halt.
The zinc price has risen more than 30 per cent this year, hitting a high of $US3369.50 per tonne last month on strong global demand and tight supplies.
The metal is used to galvanise steel and is benefiting from Chinese infrastructure development and higher steel prices.