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U.S. mining company Tacora Resources Inc. has filed for an initial public offering (IPO) on the Toronto Stock Exchange, with a plan to restart a shuttered iron ore mine in Newfoundland and Labrador.
The Scully mine, located north of the town of Wabush, was previously operated by Cliffs Natural Resources Inc., which filed for creditor protection under the Companies' Creditors Arrangement Act (CCAA) in 2015.
The mine was shuttered in 2014 in the midst of a global slump in iron ore prices.
Last summer, Tacora bought the asset as part of Cliff Natural's asset sales process under CCAA.
Tacora, based in Grand Rapids, Minn., is aiming to restart production at the mine in the fourth quarter, and commence iron ore concentrate shipments roughly a year after the IPO closes.
While no figure is specified for the equity offering, according to the prospectus filed on Monday, Tacora expects to spend approximately $205.5-million in capital expenditures to restart the mine.
Apart from the equity raise through the IPO, the company also intends to raise money in the debt markets. Tacora currently holds about US$9.6-million in cash on its balance sheet.
BMO Nesbitt Burns Inc. and Jefferies Securities Inc. are leading the offering, while Stikeman Elliott LLP is providing legal counsel to Tacora.
The offering is the latest sign of life for the Canadian mining IPO market, which last year rebounded after a protracted slump.
Canadian mining IPOs raised about $830-million in 2017, the strongest market since 2010. In October, Luxembourg-based zinc company Nexa Resources SA raised US$570-million in a dual listing in Toronto and New York, the third-biggest mining IPO ever on the Toronto Stock Exchange. A rebound in base metal prices has helped bring back investor confidence after about five years in the doldrums.
Niall McGee