Polymetals Resources Ltd (ASX: POL) has raised $35 million in a strategic move to fund the restart of the Endeavor silver-zinc mine. The company has issued 43.75 million new shares at $0.80 each, following strong support from existing and new investors. The funds will help Polymetals transition towards its first silver and zinc production, expected in Q2 2025.
Strong Support for Placement
The placement received strong backing from domestic and offshore sophisticated, professional, and institutional investors. Polymetals also welcomed new, specialist resources investors to its shareholder register. Executive Chairman Dave Sproule expressed gratitude for the support.
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A Strong Financial Position
Following the placement, Polymetals will be well-funded, with a pro forma cash position of approximately $37 million. The company will also have access to around $26 million in undrawn debt finance facilities. This capital will provide the necessary funds for the near-term restart of the Endeavor mine.
The proceeds will also be allocated to exploration activities, both near-mine and regional, and corporate working capital. The company is targeting a return to production at Endeavor by Q2 2025, with silver and zinc production expected shortly thereafter.
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Placement and Share Purchase Plan
The placement’s funds will primarily support the strengthening of Polymetals’ balance sheet. A portion will be dedicated to accelerating exploration at the Carpark prospect and other regional targets. The company also announced a Share Purchase Plan (SPP) for existing shareholders.
The SPP will allow shareholders to purchase up to $30,000 worth of shares at the same issue price of $0.80 per share. The SPP is available to eligible shareholders who were registered as of February 7, 2025.
Strategic Exploration Investment
The $35 million raise will allow Polymetals to increase its exploration activities. The company has spent the past two years collating and validating 50 years of exploration data, uncovering numerous near-mine and regional exploration targets.
“We have been building our exploration team with practical, experienced staff to advance to testing high-priority targets,” said Sproule.
A significant portion of the funds will go towards advancing exploration at the Carpark prospect, located just south of the Endeavor mine. Polymetals also aims to expand regional exploration to unlock further potential in the area.
On Track for Endeavor Restart
Polymetals is on schedule with its plan to restart the Endeavor mine. The company is focusing on capital-efficient and timely refurbishment activities. Surface and underground works are progressing as planned, and critical activities have begun on schedule.
Polymetals is also working on re-establishing access to the high-grade silver Upper North Lode (UNL) and delivering a new mobile fleet. These efforts ensure the company is on track to meet its production timeline.
“We look forward to commissioning the operation to become Australia’s next silver and zinc producer,” Sproule added.
Financial Details of the Placement
The single-tranche placement will issue 43.75 million new shares at an issue price of $0.80 per share. The placement was done under the company’s existing capacity and will raise $35 million before costs.
The offer price represents a 6.4% discount to the closing price of $0.855 on February 6, 2025, a 9.5% discount to the 15-day volume-weighted average price (VWAP), and a 6.8% discount to the 30-day VWAP of $0.858.
The placement is expected to settle on February 14, 2025, and the new shares will be allotted and quoted on February 17, 2025.
Next Steps for Polymetals
With the successful raise, Polymetals is well-positioned to move forward with its plans for Endeavor. The company remains focused on transitioning towards first production in 2025. Polymetals is also committed to creating sustainable cash flow and contributing to the community of Cobar and the broader mining industry in New South Wales.
“As well as strengthening the Polymetals balance sheet, funds from this raising will allow us to significantly step up the company’s exploration activities,” Sproule concluded. “We look forward to updating the market on our exploration results.”
The company’s next steps will include finalising the SPP and continuing its mine restart activities to meet production targets.
