29Metals has posted a $307 million net loss after tax for the first half of 2023 as it counts the costs of the extreme weather event that battered its Capricorn Copper operation in March.

It comes after non-cash impairment charges of $206 million relating to the suspended Capricorn Copper operations, asset damage or loss at the mine site, and write-down of inventories.

Operations at Capricorn Copper, 120km north of Mount Isa, were suspended in March due to the impact of heavy rainfall.

Capricorn Copper restarted mining operations in the Mammoth and Greenstone areas of the operation this month in a phased recovery plan. However mining is not expected to resume at the Esperanza South sub-level cave mine until the first half of next year.

The company also operates the Golden Grove copper, zinc and precious metals mine in Western Australia.

“29Metals’ first half 2023 financial result was significantly impacted by the extreme weather event that resulted in Capricorn Copper’s operations being suspended,” managing director and chief executive officer Peter Albert said.

“This includes loss of revenues, increased costs associated with recovery efforts and non-cash accounting impairment charges at Capricorn Copper.

“Looking ahead, we remain focussed on executing our plans to deliver positive improvements for both operations in the second half.

“We continue to progress the Capricorn Copper phased restart of operations, improving development rates at the high-grade Xantho Extended ore body at Golden Grove, completing ventilation upgrades, progressing regulatory approvals, whilst maintaining cost management and capital discipline.

“Whilst today’s result is not what we hoped for, we are confident that the progress made in the first half, under extremely challenging circumstances, sets the company on the path to delivering its potential.”

$151m entitlement offer

The company has launched a fully underwritten entitlement offer to raise $151 million.

This has the support of key shareholder EMR Capital Investors, which has committed to take up its pro-rata entitlement – $67.8 million of new shares.

“The equity raising announced today will enable the company to fund the Capricorn Copper recovery plan and also provide a platform for the company to complete key growth initiatives,” Mr Albert said.

“We are pleased that the Capricorn Copper recovery plan continues to progress, with the restart of operations at Mammoth and Greenstone earlier this month a key milestone for the company, with dewatering and rehabilitation expected to enable targeted full recovery of operations by mid H1-2024.

“In the near term, the company is focused on current water reduction measures as well as addressing tailings storage solutions to support operations.

“In the medium term, the Company intends to deliver on the tremendous exploration potential at existing orebodies, Mammoth and Esperanza South, as well as the approximately 1,900sq km tenement area surrounding the mine site.”

The funds would also allow the company to continue the ramp-up of the high grade Xantho Extended orebody at its Golden Grove site, Mr Albert said.

He said the equity raising also positioned the company well to deliver long-term growth from the development of Gossan Valley at Golden Grove, which would provide an independent production front from 2026, as well as potentially Cervantes, where conversion drilling was ongoing.