Thursday, July 18, 2024

PNRL drums up support from financiers as it seeks to open BCL mines 

As the demand for copper rises, Premium Nickel Resources Limited (PNRL) has announced pleasing reception to its capital raising exercise aimed at resuscitating the mothballed BCL mines.

This week, PNRL, revealed that with support largely coming from existing shareholders, the Canadian-based company has received commitments for the full amount of C$27.5 million (P273 million) — far exceeding the C$15 million (P149 million) PNRL had previously been seeking.

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As part of the placement, PNRL entered into a binding term sheet with EdgePoint Investment Group and another investor, which will purchase more than 7.69 million shares each, raising a total of C$12 million (P100 million). EdgePoint is expected to own 14.1 percent of the issued shares in PNRL upon completion of the placement. 

PNRL holds two mineral mines in Botswana — the Selkirk and Selebi mines — as well as other projects in Greenland and Canada. 

In June 2023, PNRL secured C$34 million (P343 million) to be partly used in bringing back the shuttered BCL mines. The financing was through three concurrent and inter-conditional transactions.

PNRL entered into a binding term sheet with a Canadian investment company, Cymbria, over an equity financing involving the sale of 14.8 million units for gross proceeds of C$16.25 million (P163 million). PNRL and Cymbria also agreed on a C$15M (P150 million) three-year term loan, with an interest rate of 10 percent per annum, payable quarterly in arrears. The term loan related obligations will be fully and unconditionally guaranteed by each of the company’s existing and future subsidiaries.

Moreover, PNRL agreed to issue an aggregate of 2 million non-transferable share purchase warrants in connection with the term loan, excisable by the lender. Cymbria agreed to pay an aggregate of C$2.75 million (P27.5 million) in option payment to two subsidiaries of PNRL.

PNRL intends to use approximately C$7.36 million (P73.7 million) of the proceeds to prepay all principal and interest related to the currently outstanding principal and interest owing in favour of Pinnacle Island. The balance of the net proceeds will be used to advance exploration and resource development at PNRL’s Selebi and Selkirk nickel, copper, cobalt, platinum-group elements sulphide mines in Botswana, including the acquisition of adjacent mineral and property rights as appropriate, and for general corporate purposes.

PNRL acquired the BCL mining assets last year for an estimated P837 million. The BCL mines were closed in 2016 by the Botswana government, which was the main shareholder, citing unfavourable copper market.

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