New Century Resources completes A$116.7 million equity raising to support ESG focused growth strategy

New Century Resources Ltd (ASX:NCZ) has completed a A$116.7 million equity raising that cornerstones its “transformational” ESG focused growth transaction and includes a major investment by Sibanye-Stillwater Limited.

This equity raising comprised a strategic 19.99% investment in the company by Sibanye-Stillwater via an equity investment of A$61 million.

The second tranche of placement shares to Sibanye-Stillwater was approved by 99.6% of New Century shareholders at the company’s Annual General Meeting on November 30, 2021.

“Supportive strategic partner”

In a statement New Century said it welcomed Sibanye-Stillwater to its share register “as a supportive strategic partner, with the objective of enhancing its profile as a global tailings retreatment leader, uniquely positioned to play a key role in future supply chains for a sustainable circular economy”.

All Sibanye-Stillwater shares in New Century are escrowed for 12 months from October 27, 2021.

Shares today are 7.09% higher to A$2.04.

Equity raising

The equity raising included a fully underwritten 1 for 4 non-renounceable pro-rata entitlement offer of new fully paid ordinary shares to raise A$46.9 million (US$35.2 million) along with an institutional placement to Sibanye-Stillwater and institutional investors of $A32.9 million (US$24.8 million).

In October Sibanye-Stillwater entered into investment agreements to acquire a 19.99% shareholding in New Century through a new equity placement and sub-underwriting of an entitlement offer, for a maximum cash consideration of US$46 million.

“Aligned with sustainability strategy”

Sibanye-Stillwater CEO Neal Froneman said: “This investment in New Century represents a significant next step in our strategy of building a leading global tailings retreatment business, diversified by commodity and geography and is aligned with our sustainability strategy of building a climate change resilient business.

“We have been impressed with what the New Century management team has achieved at developing a globally significant zinc producing business through the reprocessing of tailings, whilst facilitating the rehabilitation of an old mine site.

“We are pleased to partner with New Century Resources in this exciting next phase of their growth at Mt Lyell and support their vision of growing their Tailings Management advisory service business model globally, to produce green metals and address environmental legacy issues.”

“Engine room for growth”

On announcing the “transformational” equity raising in October, New Century’s managing director Patrick Walta said: “The New Century team has a clear focus on its vision to become a global leader in economic rehabilitation and tailings management.

“With the Century Mine asset now generating strong consistent cash flows, combined with hedging of unprecedented zinc prices and the near-term development of Silver King and other in-situ deposits, the company has created a fantastic ‘engine room’ for future growth.

“With this in place, New Century remains committed to generating significant value for shareholders through inorganic growth opportunities via further ‘Century style’ transactions and also monetisation of our established competency and track record in large scale tailings management.

“With the strategic investment by Sibanye-Stillwater and the option over Mt Lyell Copper Mine, New Century is in an enviable position to grow its ESG focused business through potential near-term ‘green’ copper supply while also developing a client focused tailings management services division.”

Story by ProactiveInvestors