Newfield Resources Ltd (ASX:NWF) is out to raise A$17.6 million to support ongoing mine development and production ramp-up at the high-grade Tongo Diamond Mine in Sierra Leone.
The diamond prospector is offering up to 117.6 million fully paid ordinary shares in a non-renounceable entitlement offer on the basis of two new shares for every 15 shares held at an issue price of $0.15 each.
These two new shares come with one option exercisable at $0.25 each and expiring in five years.
This entitlement offer will open to shareholders of the company with a registered address in Australia, New Zealand, the United Kingdom, Germany, Singapore and Indonesia on Thursday, October 26, 2023.
Funds use
The Tongo mine combines diamond resources on two adjacent mining licences covering more than 134 square kilometres and hosting 11 known kimberlites.
Newfield will use the cash injection for:
- development of the Kundu and Lando declines and access to new Level-1 mining stopes;
- production ramp-up at the Tongo Diamond Mine through further development of multiple mining faces at both Kundu and Lando;
- construction of the designed 50 tonnes per hour plant and final recovery to increase processing capacity in advance of the increased production levels;
- detailed mine planning and scheduling of the Tongo Dyke-1 resource, including various engineering studies to determine the final capital requirement to bring this ore body into the future mine plan;
- to progress the AFC due diligence workstreams; and
- general working capital and other transaction costs.
Major shareholder steps up
About $7.81 million of the offer will be underwritten by major shareholder Truth Wealth Management VCC, whose Leading Jaguar Hedge Fund currently holds about 10.2% of the company.
The offer is expected to open from October 30 to November 16 for shareholders with a registered address in Australia, New Zealand, the United Kingdom, Germany, Singapore and Indonesia.
New shares that are not acquired will be offered to the general public, including eligible shareholders, at the same issue price.
Part of broader funding strategy
“We are pleased to offer eligible shareholders the opportunity to participate in this capital raising, which will help progress the ongoing development and production at the Tongo Diamond Mine over the next six months as we work towards concluding the proposed debt financing arrangements with the Africa Finance Corporation (AFC),” Newfield executive director Karl Smithson said.
“The funds from the entitlement offer will enable the company to continue a number of development workstreams that will lead to increased production and processing capacity of the Tongo Diamond Mine.
“In addition, we plan to conduct detailed mine planning, scheduling and budgeting of the Tongo Dyke-1 resource with a view to bringing the deposit into the future mine plan.
“We would also like to take this opportunity to thank our shareholders for their support of our longer-term vision for Tongo and truly appreciate the underwriting commitment from major shareholder, Truth Wealth Management VCC.
“We look forward to updating shareholders over the coming months as we work towards production ramp-up at Tongo as well as completion of the due diligence process with the AFC.”