RMX proceeds with Mukabe-Kasari Cobalt Copper project earn-in
Published on: | by Meagan Evans
After emerging from a trading halt that it entered on Monday, Red Mountain Mining (ASX: RMX) this morning updated the market on the Mokabe-Kasari Cobalt Copper project in the DRC and detailed its recent capital raising activities.
Encouraged by final due diligence results, RMX advised that it will proceed with earn-in to acquire up to 90% of Mokabe-Kasari Cobalt Copper project in world famous central African Copper belt. The project is located in the Congolese part of the prolific Central African Copper belt, comprising artisanal licenses over approximately 116 square kilometres.
The due diligence included a short reconnaissance site visit by RMX’s technical advisor, CSA Global Pty Ltd, who carried out validation ground-work across the tenure package to ensure there’s opportunity for sufficient scale, assess geologic prospectivity, and scope future exploration work. The below samples were taken, including cobalt grades of up to 0.5%.
Of course, as with all minerals exploration, success is no guarantee – consider your own personal circumstances before investing, and seek professional financial advice.
While the final stages of RMX’s due diligence took longer than planned, the delay provided RMX the opportunity to renegotiate the economics of the staged deal.
The revised and improved commercial terms are as follows:
- The issue of 14 million RMX shares (7.5 million of which will be subject to 12 months escrow), issued pursuant to RMX’s existing placement capacity pursuant to Listing Rule 7.1;
- Payment of $70,000 on commencement of phase 1 exploration;
- Payment of $75,000 90 days after phase 1 exploration commencement, provided that RMX notifies the introducing party, CoCu Pty Ltd, that it wishes to continue with the Project; and
- Payment of US$100,000 on issue of Mining Licence (or equivalent) over the project area or portion thereof.
RMX view the renegotiation as a good outcome for shareholders. It is now moving to immediately implement a work programme with the focus on the encouraging cobalt grades that have been identified within the tenure package.
RMX also announced that it has completed it share placement, having received firm commitments from professional and sophisticated investors to raise $735,000 (before costs) via the issue of 66,818,182 new fully paid ordinary shares, at an issue price of 1.1 cents per share. That’s a 25% discount to the 15-day volume weighted average trading price to 1 September 2017.
RMX will issue 23,898,101 shares pursuant to Listing Rule 7.1 and 42,920,081 shares pursuant to Listing Rule 7.1A, with Xcel Capital acting as Lead Manager to the Placement.
The funds raised will go towards earn-in exploration activities at the Mokabe-Kasari Cobalt Copper Project, ongoing identification and due diligence on additional asset and project opportunities, as well as general working capital and cost of the offer.
Now that RMX is well funded, following the successful completion of the capital raising, it is looking forward to commencing Phase 1 exploration activities at the Mokabe-Kasari Cobalt Copper project. The company will also consider acquiring complementary assets as the Board continues to review new opportunities in the new energy metals, base metals and gold sector.