Bravo raises C$86M including Orion for Brazil nickel-PGMs project

Bravo Mining (TSXV: BRVO, US-OTC: BRVMF) closed an $86-million (US$63.5-million) public offering this month for ongoing preliminary work at its Luanga nickel-platinum project in Brazil as it prepares to bring on private equity firm Orion Mine Finance Management as a major partner.

The explorer issued 19.6 million common shares at $4.40 each for its over-subscribed offering under a previously filed $300-million shelf prospectus. The total included a $34.5 million non-brokered private placement with Orion, under which it expects to enter a participation agreement and to provide up to US$300 million in funding.

“The financing allows Bravo to continue advancing exploration and development of its Luanga project,” BMO Capital Markets analysts Dominic Bolton and Raj Ray said in a Jan. 20 note. “With platinum group metals (PGM) and nickel prices rallying, Bravo is well positioned to capture the upside in future technical studies and financing discussions.”

Bravo said it will use the proceeds to fund a preliminary feasibility study and subsequent feasibility study. The company’s preliminary economic assessment (PEA), updated in November, included a base-case net present value (NVP) of US$1.25 billion. Testing results indicate potentially significant improvements in flotation.

Shares in Bravo Mining gained 6.8% to $5.34 apiece Jan. 23 after the capital raising before falling 22% to $4.16 in Toronto by Friday, valuing the company at $543 million.

Economics improve

Analysts Bolton and Ray said in a separate note on the testing that “greater selectivity and lower mass pull implies the potential for higher concentrate grades and materially lower concentrate tonnage for the same payable metal, therefore, driving improved payabilities and reduced flotation plant capex/opex.”

The study was completed as a laboratory-scale rougher flotation and found 5-10% higher PGM and 5-30% higher nickel recoveries, relative to conventional baseline flotation, while reducing mass pull by 50%.

“The preliminary Jameson Cell results are highly encouraging and reinforce the technical optionality available to Bravo as we advance our metallurgical studies,” Chairman and CEO Luis Azevedo said  in a statement. He added that Bravo has confidence in the technology as it was installed at Valterra’s Mogalakwena PGM mine in South Africa and the Australian Mount Isa copper mine, which co-developed the tech with Jameson.

“Management believes that further investment in an expanded metallurgical development program to include larger scale (pilot plant) testing is justified,” the company said in a release.

Smelter planned

The fundraising will also support ongoing work on a vertical integration option also considered in Bravo’s November PEA. The alternative case would include downstream processing and refining activities at a smelter to be located nearby in Pará state. The company anticipated this could support a project NPV of $1.86 billion.

These alternative case economics got a boost last week when Brazilian President Luiz Inácio Lula da Silva signed a presidential decree creating the Barcarena Export Processing Zone in Pará. The zones offer favourable regulatory, tax and customs regime for companies producing export goods and services.

The proposed smelter is to benefit from the regime for 20 years. Azevedo said in a statement the creation of the zone “is a significant milestone for Bravo and materially advances regulatory certainty around our development scenario.”