Australian mining company Mincor Resources has announced its plans to raise A$60m ($40m) in capital to support the underground development at its Northern Operations.

The company also aims to advance the underground exploration and resource definition diamond drilling at its new Cassini Operation.

Mincor will use the remaining proceeds to strengthen its balance sheet over the FY2023, as it ramps up the Kambalda nickel operations ahead of full-scale production.

The company will offer 39.5 million shares in its placement to certain eligible institutional and professional investors, at A$1.39 per share, to raise a total of A$55m.

In addition, it will undertake a share purchase plan (SPP) to the fully underwritten share placement, to raise an additional A$5m.

Eligible shareholders will be able to subscribe for up to A$30 000 of additional new shares in the company, also at a price of A$1.39 a share.

The offer price represents a 14.4% discount to the company’s five-day VWAP, and a 5.1% discount to the 30-day VWAP, ended on 8 December 2022.

The SPP will begin on 21 December 2022 and close on 20 January 2023.

Mincor aims to allocate up to A$20m of the capital raised towards advancing development activities around the Golden Mile development.

The company aims to advance the grade control drilling and development access works and continue the existing extensional drilling program across the Northern Operations.

The preparatory development works are expected to commence in January 2023, with first ore development expected during the Q4 FY2023 quarter.

Mincor will also allocate up to A$15m of the capital raise to advance the underground exploration and resource definition drilling program at Cassini.

The company intends to start drilling at Cassini in late January 2023, utilising using a third underground diamond drill rig recently secured from its existing diamond drilling contractor.

The underground drilling will initially start from existing stockpile development in the main Woodall Decline, with early programs targeting the Cassini North channel, said the company.