Michael Minosora will spend the next few days working to keep his dream of reviving the Windimurra vanadium project alive after resources vehicle Atlantic flagged its second surprise capital raising in less than three months.
The cash lifeline is needed because project delays and cost overruns have left the miner with a $26.9 million working capital deficit at December 31, according to half-year accounts released yesterday.
Windimurra was supposed to be fully funded into production when Atlantic surprised investors with a $25 million capital raising at $1.20 a share in December. The latest cash call, which will eclipse the size of the December raising, is likely to include a debt and equity component and may not be completed until the middle of next week.
Atlantic shares last traded at 88¢ - 50 per cent less than they were worth a year ago.
The raising was announced a day after the departure of company chairman Ian McMaster, although the Atlantic camp was yesterday quick to hose down any suggestion of a connection.
Mr Minosora, now the group's executive chairman as well as a significant shareholder, told _WestBusiness _ the raising was not a big surprise in the context of what was effectively a $900 million project.
He said the extra money was being spent resolving problems at the project's milling component but would not deter Atlantic from hitting its target of full production in the first quarter of next year.
Atlantic is already in accelerated ramp-up mode at Windimurra, 80km south-east of Mt Magnet, having slipped about two months behind schedule.
According to its half-yearly figures Atlantic had $45.8 million in cash at the end of last year.
However, most of that is reserved for interest payments on its debts, leaving cash on hand for general working capital of just $2.8 million and a significant working capital deficit once capital commitments and other considerations were factored in.
Atlantic's progress at Windimurra has been closely watched, at least in part because of the project's chequered history since it was first mined in 1999.
The mine was closed by Xstrata in 2002 when vanadium prices fell as low as $US7.73kg and escalating operating costs put the project economics on shaky ground.
Windimurra Vanadium subsequently tried to restart the operation but had to call in administrators in 2009 after a surprise $80 million cost blowout.
Atlantic initially teamed up with Mineral Resources to try to make the project work again but the latter later stepped aside.