LionOre Mining International (LIM-T) has wrapped up an offering of 27.5 million special warrants at $3.65 apiece for gross proceeds of about $100.4 million.
This offering was led by RBC Capital Markets and Haywood Securities. One warrant allows the holder to receive one LionOre share without further payment.
LionOre will receive 25% of the proceeds upon closing of the financing; the remaining 75% will be held in escrow until LionOre closes its $118-million acquisition of Anglo American‘s (AAUK-Q) nickel interests in Botswana.
If the acquisition falls through, the holders of the special warrants can retract all or a portion of the funds in escrow. The deal is subject to the approval of the Botswanian government. If approved the transaction will take effect Jan. 1, 2002.
The offering is expected to close around May 29, 2002.
LionOre plans on covering the remainder of the purchase price via debt financing.
Anglo’s assets include a 43.35% stake in Tati Nickel Mining Co., a 7.5% direct interest in BCL, and a 12.65% stake in Botswana RST (which in turn owns 85% of BCL). In the end, LionOre will own 85% of Tati, and the government of Botswana will hold the remaining 15% stake.
Tati Nickel operates two mines near Francistown: Selkirk, an underground operation, and Phoenix, an open pit. Ore from Selkirk is concentrated and then smelted on a toll basis at BCL’s plant at Selebi-Phikwe. Meanwhile, Phoenix ore is treated at the mine, then further upgraded and smelted at BCL, with nickel matte sent to third parties for refining.
In 2001, Tati produced 6,305 tonnes nickel and 2,157 tonnes copper, and an expansion is under way.
BCL mines and processes ore in Botswana to produce copper, nickel and some cobalt. Last year, the company produced 12,600 tonnes nickel and 14,900 tonnes copper in matte.
The increased stake in Tati coupled with the new Emily Ann nickel mine in Australia should boost LionOre’s annual nickel output to 15,890 tonnes nickel metal-enough to rank as the world’s 10 largest nickel producers.
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