Top ASX Resource Capital Raisings in 2020

Australia saw a record year in equity raising activity in 2020 as companies across the board looked for ways to mitigate the impact of COVID-19.

Government lockdown measures took a toll on project development, but several companies listed on the Australian Securities Exchange (ASX) were able to raise capital to weather the pandemic storm.

Here the Investing News Network lists the top ASX resource capital raisings done in a single transaction in 2020, using Refinitiv data for the metals and mining sector.

1. Newcrest Mining (ASX:NCM)

Total raised in 2020: US$772.4 million

One of the world’s top gold producers, Newcrest Mining has operating mines located in Australia, Canada and Papua New Guinea. In 2020, the company produced 2.2 million ounces of gold at an all-in sustaining cost of US$862 per ounce and generated an underlying profit of US$750 million.

On April 30, 2020, Newcrest announced it was undertaking a AU$1 billion fully underwritten institutional placement, and a share purchase plan targeting up to AU$100 million. With the cash raised, the company intended to purchase the Fruta del Norte financing facilities and to fund future growth options, such as the construction of declines at Havieron and Red Chris.

The company went on to purchase the Fruta del Norte financing facilities for US$460 million, and both Havieron and Red Chris received funding and regulatory approvals earlier this year for AU$146 million and C$135 million, respectively.

2. IGO (ASX:IGO)

Total raised in 2020: US$577.271 million

IGO owns the Nova nickel-copper-cobalt operation and holds a 30 percent interest in the Tropicana gold mine joint venture. At the end of last year, the company inked a AU$1.9 billion deal with top lithium producer Tianqi Lithium (SZSE:002466) that will provide IGO with a 24.99 percent indirect interest in the Greenbushes lithium mine and a 49 percent indirect interest in the Kwinana lithium hydroxide plant.

To fund the deal, IGO proposed to use a combination of AU$1,100 million in new debt facilities, an equity raising of up to AU$766 million and existing cash reserves of between AU$85 million and AU$149 million. The funding was successfully completed, and Tianqi shareholders also gave approval earlier in 2021.

3. Lynas (ASX:LYC)

Total raised in 2020: US$306.975 million

The second largest producer of rare earths, and the only one outside of China, Lynas operates the Mount Weld rare earths deposit in Western Australia. The company’s 2020 production was hit by COVID-19, as it closed its Malaysian plant for six weeks following guidelines from the government.

In Australia, Lynas plans to process low-level radioactive material from its Mount Weld mine at a new cracking and leaching plant in Kalgoorlie in Western Australia. That will allow the company to move part of its operations off its Malaysian plant. To fund the construction and its Lynas 2025 plans, the company was able to successfully raise AU$425 million.

4. Nickel Mines (ASX:NIC)

Total raised in 2020: US$306.975 million

Nickel-focused producer Nickel Mines holds an 80 percent interest in the Hengjaya and Ranger projects, both of which operate two line rotary kiln electric furnace plants producing nickel pig iron (NPI) within the Indonesia Morowali industrial park.

In the December quarter, Hengjaya produced 5,718.9 tonnes of nickel metal at an average NPI grade of 14.9 percent, while Ranger produced 5,808.1 tonnes of nickel metal at an average NPI grade of 15 percent. The company also launched and successfully completed a AU$364 million equity raising that month to fund the acquisition of its initial 30 percent interest in the Indonesia-based Angel nickel project.

5. Coronado Global (ASX:CRN)

Total raised in 2020: US$180.1 million

One of the world’s largest producers of high-quality metallurgical coal, Coronado Global owns a portfolio of mines and development projects in Queensland, Australia, and in Virginia and West Virginia in the US.

In August, the company launched a AU$250 million fully underwritten equity raising to improve its financial flexibility due to the impact of the COVID-19 pandemic.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.