PERTH (miningweekly.com) - Tungsten developer King Island Scheelite (KIS) has completed a A$31-million capital raise to fund the redevelopment of its Dolphin project, in Tasmania.

KIS on Monday announced that it would issue 222-million new shares, at a price of 14c each, in two tranches, with the placement price representing a 17.6% discount to the company’s last traded price.

The first tranche of the placement will consist of 102-million new shares to sophisticated, professional and institutional investors, to raise an initial A$14.3-million under the company’s existing placement capacity.

The second tranche of 80-million shares, to raise a further A$11.2-million, would be provided to the company’s debt facility providers, subject to shareholder approval.

KIS in September announced A$33-million in debt funding, which was secured from a group of lenders comprising major shareholders and an external party.

In addition to the share placement, KIS on Monday also announced that it would undertake a share purchase plan (SPP), also priced at 14c a share, allowing existing shareholders to subscribe for up to A$30 000 worth of new shares in the company, to raise an additional A$5.5-million.

The equity raising, along with the debt facilities and the A$10-million Tasmanian government loan announced in February this year, is expected to allow KIS to redevelop the Dolphin project, subject to shareholder approval.

“We are delighted to have secured the support of new and existing shareholders through this A$31-million capital raise, at what is a pivotal moment in the company’s history,” said executive chairperson Johann Jacobs.

“Our strategy has allowed us to move forward with our plan to redevelop KIS’ Dolphin tungsten mine, which hosts one of the few remaining high quality tungsten deposits in the Western world. Having secured commitments for the funding, we can now continue to execute on our vision to develop world-class tungsten mining operations in Tasmania.”

A previously completed economic analysis of the Dolphin project estimated that some A$65-million would need to be invested to bring the opencut operation into production to produce 20 t/y of tungsten over an eight-year mine life.

The updated feasibility study has estimated a start-up capital cost of A$72.1-million to develop the Dolphin project, with life-of-mine capital estimated at A$129.2-million, placing capital cost for the operation at A$40/t of tungsten produced.