Metals of Africa bags $3 million deal
An oversubscribed placement for Metals of Africa (ASX:MTA) could have the effect of sharpening the market’s focus on its zinc prospects as well as full funding its nearer-term graphite play in Africa.
The ASX-listed company told the market this morning that it had managed to get agreements for a $3 million placement, an offer which it said was oversubscribed.
It is aiming to raise $3 million by the issue of 66.8 million shares at 4.5c, a price equivalent to MTA’s 15-day volume weighted average price.
It currently has 129.6 million shares on issue.
The deal will be completed via two tranches, with the first placed under the 15% placement rule – meaning shareholders do not need to sign off on the deal.
However, the second tranche will need shareholder approval.
MTA directors intend to participate in the second tranche, applying for shares in lieu of director fees from October to December, saving the company money.
The majority of the funds raised will go towards detailed metallurgical work and a prefeasibility study at its flagship graphite project in Mozambique, where it is aiming to decalre a maiden JORC resource later this year.
However, the deal also had the effect of securing Navin Sidhu and Farjoy Ltd onto the register.
The addition of Sidhu onto the register, as a cornerstone investor in particular, could focus the market’s attention onto MTA’s zinc prospect in Gabon.
Sidhu is the CEO of MMG, a major integrated galvanising business in Malaysia.
It is a major zinc end user, and the addition of Sidhu onto the register is a sign that zinc users are increasingly keen to secure zinc supplies in a tight market MTA said.
The Australian explorer currently has three projects on its plate, with its two graphite projects in Mozambique and a zinc-lead project in Gabon.
Its flagship graphite project is at the Montepuez Central Graphite Project in the prolific Cabo Delgado graphite province.
So far, it has found three key prospects at the Montepuez Central Graphite Project including the Buffalo, Elephant, and Lion prospects. During the last quarter, it found high-grade mineralisation at the Buffalo prospect including a 50m section from surface with total graphite content of 9.86%.
Meanwhile at Elephant, it has found a mineralisation with 5-15% graphite content from 8.7m below the surface to 93m below the surface.
It is currently aiming to complete a prefeasibility study on a project centred on Montepuez, while it is also scheduled to drill at the nearby Balama Central project in the fourth quarter.
The placement to Sidhu could sharpen the market’s focus on MTA’s other project, the Kroussou Project.
Over in Gabon, MTA discovered the highest ever grades of zinc and lead ever recorded in the country as part of its rock sampling program at its Kroussou Project.
It returned grades of up to 9.69% zinc and 33.1% lead, with elevated copper and silver thrown in as a bonus.
As well as the rock sampling, it has also completed a detailed mapping project in the area, meaning that it now has a better idea of where to look next as it seeks to firm up the resource at Kroussou.
The mapping work identified continuous cretaceous contact over the 85km project area, and is hoping it will provide further zinc and lead prospects to follow up on.
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