JOHANNESBURG (miningweekly.com) – Australian junior Cradle Resources reported on Friday that it had secured commitments for a A$2.16-million capital raising, which would carry its working capital requirements until project financing came through.
The company, which was developing the Panda Hill niobium project, in Tanzania, said that it would raise the funds by placing eight-million shares at 27c each with sophisticated investors.
The working capital requirements included Cradle’s 50% share of $1.5-million for the final instalment of consideration owed to the project vendor. This had to be paid in September 2016.
The company stated that debt financing and offtake agreements for the project were ongoing and were advanced.
The definitive feasibility study (DFS) for Panda Hill demonstrated that the project was economic, with a pre-tax internal rate of return of 32%. The project was estimated to generate earnings before interest, taxes, depreciation and amortisation of about $112-million a year over its 30-year mine life, at a cash margin of 49%, and with an initial capital outlay of $196-million.
The DFS considered starting production at a rate of 1.3-million tonnes a year, and ramping up to 2.6-million tonnes a year after the fourth year of production. The project was expected to have an average life-of-mine production of 5 400 t/y of contained niobium.