Metals Acquisition (ASX: MAC) shares are under a lot of pressure on Thursday morning.
At the time of writing, the ASX 300 copper stock is down a sizeable 12% to $18.30.
Image source: Getty Images
Why is this ASX 300 copper stock being sold off?
Today's decline hasn't been driven by a broker downgrade or weaker copper prices. In fact, the copper price lifted modestly overnight.
Instead, the catalyst for today's selling has been a capital raising.
According to the release, Metals Acquisition has received firm commitments via an oversubscribed placement to raise $150 million before costs.
These funds are being raised through the issue of 8,333,334 Metals Acquisition shares at $18.00 per new share. This represents a 13% discount to where its shares last traded.
The ASX 300 copper stock notes that the placement was strongly supported with high levels of institutional participation. This includes from leading global investor groups both in Australia and offshore.
Why is it raising funds?
The release reveals that proceeds from the placement, together with existing cash, will enable Metals Acquisition to optimise its balance sheet and de-lever following the acquisition of the CSA Copper Mine from Glencore in mid-2023. It will also provide additional flexibility to pursue strategic inorganic growth opportunities.
The ASX 300 copper stock's CEO, Mick McMullen, commented:
Following the acquisition of CSA in mid-2023 and listing on the ASX in early 2024, MAC has placed greater focus on optimising its balance sheet and determining an appropriate capital structure more reflective of the strong asset quality and the markedly improved credit proposition that MAC today represents compared to mid-2023.
Today's Placement is testament to the high-quality nature of CSA and the significant work that has been undertaken by management to deliver on a range of operational improvements over the past year.
McMullen also spoke positively about the company's production outlook. He said:
Q3 2024 delivered another strong operational result for the Company with copper production of 10,159 tonnes at an average grade of 4% copper and C1 cash costs expected to be in the range of US$1.90-2.002 per pound.
We remain on track to deliver around the mid-point of our full-year 2024 copper production guidance of between 38,000-43,000 tonnes and will provide a more fulsome update on the status of operations as part of our quarterly report later this month.
Despite today's decline, the ASX 300 copper stock is up 14% since this time last month.
