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Clean TeQ Holdings said this morning its underwritten A$150 million placement, announced yesterday, has closed heavily oversubscribed.
The placement was being conducted to accelerate development of the Sunrise nickel-cobalt project in New South Wales.
The company said demand for the placement, which was conducted at a modest 6.1% discount to Wednesday’s close, “significantly” exceeded the $150 million sought.
Clean TeQ is also conducting a share purchase plan at the same issue price of $1.15 per share.
The theoretical number of shares that could be issued is 78 million, which could net the company up to a further $89.7 million, but Clean TeQ has reserved the right to cap the SPP.
Meanwhile, last week Toronto-listed Cobalt 27 Capital Corp announced a private placement to raise up to US$130 million.
The company, led by Pala Investments’ Anthony Milewski, announced this week that due to demand, it was upsizing the offer to $185 million.
Cobalt 27 owns physical cobalt, and streams and royalties.
The company made its Toronto debut last year after raising $200 million.
“At a time when we see the acceleration of the adoption of the electric vehicle and tremendous opportunity to capitalise on the structural changes underway in the energy and automobile industries, the proceeds of this private placement will strengthen Cobalt 27’s balance sheet and liquidity, and better positions us to execute the many opportunities currently available to the company,” Milewski said.
It comes as cobalt rose to a new high of US$84,020 per tonne overnight.
It is up by 11.7% since the start of the year, including a rise of 3.7% so far in March.
A driving force behind the rising cobalt price is the proposed changes to the mining code in the Democratic Republic of Congo, the world’s leading cobalt producer.
The updated mining code has already passed both parliamentary chambers and is close to be signed into law by President Joseph Kabila.
It proposes upping royalties on metals from 2% to 3.5%, and cobalt up to 10% if it is deemed a strategic mineral by the government, with the kicker being a removal of a 10-year amnesty existing miners were supposed to have on new rules.
Mining heavyweights, including Glencore boss Ivan Glasenberg, Ivanhoe Mines founder Robert Friedland and Randgold CEO Mark Bristow, have had a marathon six-hour meeting Kabila in Kinshasha on Wednesday to discuss their concerns over the changes.
Randgold said the President gave assurances that the issues raised by the miners would be resolved through discussions with the government, but only after the code was signed into law.
"The president of the republic assured the mining operators that they are economic partners of the Democratic Republic of Congo and their concerns will be taken account of through a constructive dialogue with the government after the promulgation of the new mining law," Kabila said in a translated statement.
Late last month, Glasenberg said the new code would likely create underinvestment in the DRC.
“Of course, if the code comes in at the way that it’s being drafted the way we see it, and yeah, that will be a concern, that can the world produce as much cobalt that it’s going to need?” he said.
“If the belief is that electric vehicles by the year 2030 will be 30% of the vehicles produced, you’ll need a lot of cobalt for that. So what happens in the DRC is going to be very important going forward.”
