Greenland Resources (NEO: MOLY) has entered into a subscription agreement for a private placement financing with investment funds advised by Maj Invest, one of Denmark’s leading asset management companies.
Under the terms of the private placement, Greenland Resources will issue about 4.2 million common shares at a price of 71¢ per share to raise gross proceeds of $3 million. The proceeds will be used to advance its Malmbjerg molybdenum project.
Malmbjerg is envisioned as an open pit operation and is located in east-central Greenland, about 30 km off the coast. Its design focuses on reduced water usage, low aquatic disturbance and low footprint using a modularized infrastructure.
A feasibility study completed last year outlined a 20-year mine life. Using an US$18 per lb. molybdenum price as the base case, the project’s after-tax net present value (at a 6% discount rate) was calculated at US$1.2 billion, with an internal rate of return of 22.4%. The payback period was forecast at 2.4 years.
The project hosts proven and probable reserves totalling 245 million tonnes at 0.176% MoS2, for 571 million lb. of contained molybdenum.
As the high-grade molybdenum is mined for the first half of the 20-year mine life, the average annual production for years 1-10 is forecast at 32.8 million lb. per year of molybdenum metal at an average grade of 0.23% MoS2.
The project had a previous exploitation license granted in 2009.
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