RMX one step closer after partner elects to list
Junior gold company Red Mountain Mining (ASX:RMX) is a step closer to funding of its Batangas Gold Project dreams after strategic partner Bluebird Merchant Ventures announced its intentions to list on the London Stock Exchange.
Bluebird is planning to list in early December, and the plan is to use cash from the IPO to fulfil a funding commitment covering the Batangas Gold Project in the Philippines.
RMX told its shareholders this morning that the timeline for the first part of the funding deal had been pushed back to December 8 at the latest to allow Bluebird to complete the listing.
At this stage the plan is for Bluebird to pay an initial $US1.7 million ($A2.4 million) in two tranches to allow Bluebird to take a 25% stake in Red Mountain Mining Singapore, the company which holds the promising gold project.
Exploration on the project will then be funded on a pro-rata basis, but Bluebird will have the option of bumping its stake up to 50.1% for another $1.7 million before September 30 next year.
However, should Bluebird not take up the extra stake it will still have an opportunity to do so, with Bluebird having to chip in $3.8 million to get the interest.
The cash from the two phases of funding will go toward a definitive feasibility study, permitting at the project, and drilling of new high-grade gold targets at the Lobo prospect.
About the Batangas Gold Project
The funding is going towards a definitive feasibility study and drilling at the Batangas Gold Project in the Philippines.
Total mineral resources at Batangas sit at 2.97 million tonnes @ 2.4 grams per tonne gold for 227,000 on an indicated basis, and 3.22MT @ 2.1g/t for 218,000oz on an inferred basis.
The Lobo area features 82,000 oz on an indicated and inferred basis – including the South West Breccia mine, which will be the first start-up mine at the project.
Free cash flow from production of the first 100,000oz is expected to be $45 million – which recently got a boost by 50% due to increases in the Australia dollar gold price and a drop in the Philippine oil price.
Capex at this stage is expected to be $15 million, a figure set out in a scoping study and feasibility update, but a definitive feasibility study would add more certainty around the numbers.