SABLE Exploration intends to raise R52.2 million from a fully underwritten rights offer being undertaken at a R1 per share pricing to bankroll its exploration and other mining projects.
The company’s board has already approved the rights offer.
Sable, which has thin trading volumes on the JSE, has various vanadium and iron ore prospecting rights and reported a headline loss of 143.34 cents in the year to end-February 2023.
The company, however, is progressing with its other mining projects as it seeks capital for its exploration and planned mining programmes.
In September, Sable entered into an agreement with PBNJ Trading and Consulting for a R17m loan pending conclusion of its rights issue.
PBNJ, which has “undertaken to follow its rights for R31.2m”, has underwritten the rights issue for a further R16.3m.
Sable has also entered into an agreement with IPace for a joint venture business “to conduct the business of commissioning, operating and maintaining of a Dense Medium Separation (’DMS’) plant to produce DMS grade magnetite” for sale to the coal industry.
“The plant will be based on Ironveld Mining’s Lapon mining right and will utilise ore from the mining operations to supply the plant. IPace is the operating partner and will be responsible to erect, operate and maintain the plant and the marketing of the product,” the company said on Friday.
At full production, it is expected that the plant could produce up to 10 000 tons per month of DMS grade magnetite.
Lapon Plant will attain full ownership of the beneficiation plant. The estimated capital cost of the beneficiation plant amounted to R15m, which would be advanced as a loan by Sable.
“This is an exciting opportunity for Sable to invest in a cash-flow generating business. SPH and IPace have agreed that an investment in a larger plant will be considered once the proposed plant has reached its full capacity,” Sable said.
Profits from the joint venture were expected over the next six months, paving the way for repayment of the capital investment.