Millennium raises $16.6 million and restructures debt

THE BOURSE WHISPERER: Millennium Minerals has received firm commitments for a $16.6 million capital raising at an issue price of 1.9 cents per share.

The company has now restructured its debt facilities to enable it to assess a medium term production expansion.

This restructure will also provide the company with additional working capital reserves during the ramp up phase of its Nullagine gold project.

Nullagine Deposit Location Plan. Source: Company announcement

The capital raising was supported by institutions and high net worth individuals and is to be completed in two tranches.

The first tranche for $8.5 million settles under the company’s 15 per cent rule.

The second tranche of $8.1 million will settle after Millennium receives shareholder approval at the company’s Annual General Meeting scheduled for April 2012.

“We are delighted to be in a position to evaluate the potential to expand the project’s production capacity that is indicated by the recently announced Ore Reserve Estimate and our continuing exploration success,” Millennium Minerals chief executive officer Brian Rear said in the company’s announcement to the Australian Securities Exchange.

“This capital raising, together with our increased debt facilities, will also provide for increased capital construction reserves and for working capital during a conservative operational ramp up schedule.

“Following a 31 per cent increase in reserves late last year we have been evaluating a significant upsizing of our Nullagine gold project to best achieve our 100,000 ounce annual production base target whilst maintaining an eight year mine life or better.

“We are well advanced in the development of our project and are on time and on budget with a target date for practical completion in August this year.

“We are shifting our focus to commencing pit operations in June 2012 ahead of commercial production being scheduled for the fourth calendar quarter.”

The Nullagine gold project is a 1.33 million ounce gold resource contained within 7 deposits on granted mining leases.

The largest deposit within the project is Golden Eagle, which contains 62 per cent of the total Mineral Resource inventory.

Millennium said construction of the project’s gold processing plant and associated infrastructure remains on schedule and within the company’s approved $87.6 million capital cost budget.

Commissioning of the plant is scheduled to start in the third calendar quarter of 2012 with commercial production planned for the fourth calendar quarter.