Mineral Resources Ltd (ASX: MIN) is back near its highs on Tuesday, with the rally showing little sign of slowing.
Shares are up 2.75% to $63.96 in morning trade, leaving the stock within striking distance of its January peak of $65.79.
That follows a gain of more than 270% across the past 12 months, as demand for resources exposure has picked up again.
The move comes after a new announcement was issued before the open.
A major refinancing deal lands
According to a release, Mineral Resources has priced a US$1.3 billion senior unsecured notes offering.
The deal includes two tranches, with US$650 million due in 2032 and another US$650 million due in 2034. The notes carry interest rates of 6% and 6.25% respectively.
Settlement is expected later this month, with interest payments scheduled twice a year.
The proceeds will be used alongside existing cash to refinance debt, including the full repayment of US$625 million in notes due in November 2027.
It will also cover the remaining balance of US$1.1 billion in notes due in October 2028.
Lower costs and longer runway
The refinancing is expected to improve the company’s funding position.
Mineral Resources estimates annual finance cost savings of around $48 million. At the same time, its weighted average cost of debt is projected to fall from 8.4% to 7.4%.
Debt duration is also being extended, with the average maturity moving from 3.1 years to 5 years.
Overall, this lowers interest costs and spreads repayments over a longer period.
Commodities backdrop adds another layer
The update comes at a time when commodity prices have been moving higher.
Lithium prices have climbed roughly 17% over the past month, with demand picking up and supply tightening.
Iron ore has also edged higher, rising about 1% over the same period.
Part of that move has been tied to geopolitical tension, including the US-Iran conflict, which has brought attention back to resource stocks.
With exposure to both lithium and iron ore, Mineral Resources is tied closely to those price moves.
Strong run keeps attention on the stock
Even before today’s announcement, the share price had been trending higher.
The stock is up more than 22% over the past month and has stayed near the top of its range despite some volatility.
That kind of price action points to buying on dips, with support coming from both company updates and the broader commodities cycle.
With the balance sheet improving and commodity prices holding up, the latest update keeps the stock on investors’ radar.
The post Mineral Resources just made a $2 billion move. Here’s why the stock is climbing again appeared first on The Motley Fool Australia.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.