Africa-Press – South-Africa. Copper 360 is undertaking a R1.5 billion recapitalisation, more than double its market cap on the JSE, to raise funding and reduce its debt burden.
This rights offer forms part of a broader company restructuring aimed at raising sufficient funding for short- and medium-term growth, reducing its debt burden to improve profitability, and mining several orebodies.
To this end, Copper 360 has entered into a series of agreements to recapitalise the company and restructure its long-term debt instruments.
Copper 360 is South Africa’s only listed primary producer of copper through environmental clean-up. The miner operates in the Northern Cape.
It was formed and launched its JSE listing in November 2022 through a reverse takeover of copper producer Big Tree Copper and copper mining company SHiP Copper.
It is currently listed on the JSE with a market cap of R489.5 million and a share price of 68 cents.
On Friday, 5 September, Copper 360 informed shareholders that it has entered into a series of agreements regarding its recapitalisation and restructuring.
In terms of these agreements, the company will undertake a rights offer of R1.15 billion at an issue price of 50 cents per ordinary share.
The rights offer will comprise new equity of R400 million and up to R750 million from a debt conversion.
The R1.15 billion of new ordinary shares will be offered to existing shareholders through a combined claw-back offer and rights offer.
The miner explained that these additional funds will aid its transition from an exploration company to a copper-producing junior miner.
It said the capital secured through the claw-back offer and the rights offer will not only enable the company’s sustainable long-term profitability but also provide the capital required to enable its growth in stages.
Copper 360 plans to initially reach 40,000 milled tonnes per month within 12 to 18 months and then grow to 60,000 milled tonnes per month within 24 months.
The debt conversion will be focused on Copper 360 shareholders who hold special debt or royalty agreements.
The company reached an agreement with these shareholders to convert their debt instruments into ordinary shares. This debt conversion will result in the issue of a maximum of 1.5 billion new ordinary shares.
The miner explained that its balance sheet has been heavily geared for some time, and this debt conversion will allow it to reduce debt and make its ordinary shares more attractive.
“It became apparent that not only the gearing level but also the funding cost of the debt instruments were unsustainable and made the company’s ordinary shares unattractive as an investment,” it explained.
Therefore, it hopes that the restructuring of the debt instruments creates a stronger balance sheet, geared for growth.
The miner hopes this will also result in a simplified capital structure, with ordinary shareholders able to reap the rewards of profitable trading.
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