True North Copper (TNC), an Australian mining company, has announced a A$5m ($3.2m) share placement to meet its working capital needs.

In this regard, the miner entered a binding documentation with Millinium Capital Managers, acting as the trustee for MP Materials and Mining Group Fund.

A specialist mining investment fund, MP Materials and Mining Group Fund is supported by high-net-worth individuals as well as family office investors.

This placement involves the issuance of 41,666,667 fully paid ordinary shares at A$0.12 each.

The issue price of A$0.12 per share is a 66.67% premium over the last stock close of A$0.072. According to TNC, this reflects robust investor confidence in its growth prospects.

Settlement of the placement and the issuance of shares are anticipated to be done in tranches in the coming seven business days.

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The company intends to fund exploration programmes using the capital raised.

In a stock exchange filing, TNC said: “The Shares will be issued under existing placement capacity pursuant to Listing Rule 7.1A and will be subject to voluntary escrow for a period of 12 months from the date of issue.”

In January this year, TNC received a four-year $28m (A$42m) senior secured loan facility with Nebari Natural Resources Credit Fund II LP, to support its Cloncurry Copper Project (CCP) in Queensland.

Of the total loan amount, $18m was disbursed immediately while the remaining $10m is contingent on the commencement of commercial sulphide ore production at the CCP.