Shaw and Partners is delighted to be Lead Managing Metro Mining Ltd (ASX:MMI)’s $44m raising to restructure its junior debt profile, accelerate the re-finance of its senior debt and to allow it to bring forward additional operational improvements that will be delivered through strong cash generation as it ramps up to 7mt pa.

MMI’s MCap of $200m has doubled as it has installed measures to double its capacity at its Bauxite Hills operation to 7mt pa from 3.5mt pa. MMI expects to deliver 6.3mt - 6.8mt of bauxite to China in calendar year 2024 at a margin of $15/t. This should generate $95m of EBITDA and approximately $60m in free cash after capex, corporate and finance costs.

Yesterday the Company announced that the Offshore Floating Terminal (OFT) Ikamba had commenced operations. The Ikamba is the most significant part of Metro’s expansion project to 7mt pa. It enables the faster loading of vessels, loading of larger vessels up to Newcastlemax size (220,000 tonnes) and due to its size, can operate safely in more difficult weather condition. Ikamba, is the Ankamuthi name for saltwater crocodile, an important totem for the traditional owners.

With global aluminium demand expected to rise by ~40% by 2030 Metro is seeing a robust supply/demand backdrop for bauxite price which is up 40% over the last couple of years. This year’s production has already been sold to key offtake partners including the worlds largest producer of Aluminium. Metro is targeting being the lowest cash cost supplier to China in 2026. MMI’s Board and senior management are all drawn from the likes of Rio, Glencore and AMCI and have bigger plans for MMI’s logistics, product marketing and transhipment expertise.

The capital raising is being executed a 4.1c which represents a 11% discount to the last close and an 8% discount to the 5 day VWAP. The strong pricing reflects the fact that MMI is at an inflexion point in its expansion and about to become strongly cashflow generative assuming it hits its guidance range.