Caravel is funded to progress bankability study for its flagship copper project
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Caravel is now funded to progress the next step of development for its namesake copper project – namely the imminent commencement of the key Bankable Feasibility study.
This follows new and existing institutional and sophisticated investors showing their support for the company and its project by providing firm commitments for $9.5m in shares under a placement priced at 22c per share.
Proceeds from the placement will fund the BFS, permitting and infrastructure studies, and other development activities.
Additionally, Caravel Minerals (ASX:CVV) will look to raise up to $2m on top of the placement funds through a share purchase plan for all eligible shareholders.
Both the placement and SPP includes the issue of one option exercisable at 33c and expiring two years from the date of issue for every two shares subscribed for.
“We are delighted with the support received from both domestic and international institutions as part of this capital raising, which marks an important milestone in our strategy to advance the Caravel copper project towards development,” managing director Don Hyma said.
“The strong response from investors both domestically and overseas reflects the scale and quality of the Caravel copper project as one of the few long-life copper development assets on the horizon globally, with the added attraction of being located in a Tier-1 jurisdiction close to world-class infrastructure and services.”
He added that the addition of new, high-quality investors to the company’s register – along with support of existing shareholders, ensured that the company had sufficient capital to progress key workstreams and maintain strong momentum over the coming months on the BFS, which is targeted for completion in the first half of 2024.
Capital Economics has flagged that a physical shortage of the red metal, which is so critical for electrification, is emerging and that demand growth should recover in early 2024.
The placement of about 43.2 million new shares represents about 9% of the company’s issued capital and is priced at a 16.5% discount to the five-day volume weighted average price of $0.264.
Additionally, directors in the company plan to subscribe for about $500,000 worth of shares in the placement, which is subject to shareholder approval.
Meanwhile, shareholders will have the opportunity to subscribe for $30,000 worth of shares under the SPP.
The Caravel project in WA’s Central Wheatbelt region currently has a resource of 1,180Mt grading 0.24% copper for 2.84Mt of contained copper.
It is expected to be produce 71,000t of copper per annum over the first five years, which will make it one of the largest copper mining operations ever delivered in Australia – comparable in fact to the likes of OZ Minerals’ Prominent Hill and Carrapateena in South Australia and Sandfire’s recently shuttered DeGrussa in WA.
A recent review for the metallurgical process flowsheet that is intended to underpin a simplified process flowsheet design has already led to an increase in process plant capacity from 27Mtpa to 30Mtpa as well as the inclusion of a molybdenum recovery circuit to produce the metal as a separate marketable by-product.
Perth-based Lycopodium Minerals has also been selected as lead engineer for the BFS and is carrying out metallurgical test work programs to support the key study.
This article was developed in collaboration with Caravel Minerals, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.