Minnesota-based Tacora Resources Inc. on Feb. 5 filed a prospectus for an IPO on the Toronto Stock Exchange as it looks to restart operations at its Scully iron ore mine in Newfoundland and Labrador.
The company did not specify terms or a price for the IPO but needs CapEx of about C$205.5 million to restart the mine, which was moved to care and maintenance in 2014 by previous owner Cliffs Natural Resources Inc., now known as Cleveland-Cliffs Inc.
Tacora completed the acquisition of Scully in July 2017 and signed an iron ore offtake deal with Cargill to sell all the high-grade iron ore concentrate produced at the mine through 2022.
A feasibility study on Scully outlined an after-tax net present value of C$1.12 billion, at an 8% discount rate, and an internal rate of return of 40.7% with payback on investment in 2.6 years.
The project's average annual concentrate production will be 6 million tonnes at a free-on-board cash cost, including royalties, of C$52.22 per dry tonne over a 26-year mine life.
"We have taken steps to significantly de-risk the restart and operation of the Scully Mine and expect to begin production at the mine in the fourth quarter of 2018 and commence shipments of concentrate within twelve months following completion of the Offering," Tacora said in the prospectus.
The company had cash of about US$9.6 million as of Dec. 31, 2017.
