Zinc development company Red River Resources has received commitments to raise $30m through a two-tranche placement.
Proceeds from the placement, in combination with the company’s current cash balance of $10m, will fund the recommencement of the Thalanga Zinc Project in Queensland.
The first tranche will consist of 76.1 million shares and be settled on 7 December 2016, while the second placement will comprise 86 million shares and be completed in January 2017.
Hartleys Limited was the broker to the offer, new shares for which will carry a price of $0.185 each.
Red River Resources claimed to receive strong interest from leading investors in Australia and overseas.
Managing director Mel Palacian said: "We have been watching the strong performance of the zinc, copper and lead prices, and the board has taken the view that now is the right time to bring Thalanga back into production.
“We look forward to delivering this project in the most efficient way possible, and to generating strong cash flows.
“Our recent exploration results, including the discovery at our Liontown East prospect, have demonstrated the strong exploration potential across the Thalanga region.
“During the upcoming development and production phase we will continue to have a strong focus on exploration, focussing equally on extensions to known deposits as well as testing the deep pipeline of green fields targets.”
In November 2015, Red River published the Restart Study, which indicated that the project has low operating and pre-production capital costs, as well as a short timeline to production.
The Restart Study was based on production from three deposits, including West 45, Far West and Waterloo.
Red River plan to use the funds from the proceeds for West 45 mine development, plant refurbishment, infrastructure, and costs associated with restarting the mine.
The company expects to start production at the Thalanga Zinc project from second half of 2017.
Image: Thalanga processing plant. Photo: Courtesy of Red River Resources