Oct 28, 2020

New Century launches $35m capital raising

New Century launches $35m capital raising

New Century Resources has announced a $35 million ($US25 million) capital raising to reduce company debt.

It is undertaking a $20.7 million ($US15 million) placement and a non-renounceable pro-rata entitlement offer for up to about $14 million ($US10 million).

The company said the funds from the capital raising were intended to expedite debt repayment (it has senior secured facilities from Varde
Partners of almost $US50 million) and improve New Century’s balance sheet.

New Century said its Century zinc operations had delivered positive operational cashflow ($13.2 million adjusted EBITDA) in the September 2020 quarter, with a strong exit rate and improving macro-economic conditions.

But the heavy weighting of the secured debt repayment schedule to the near-term represented an unsatisfactory risk to maintaining a sufficient liquidity buffer for the business to properly manage irregular shipping and
invoicing cycles, it said.

“The retirement of debt therefore alleviates significant business and financial risk for New Century while also providing the opportunity for capital allocation toward exploration opportunities,” the company stated.