Haranga Resources will issue 15 million new shares to a subsidiary of Lippo China Resources, raising $6 million in the process. The sale will see Golden Rain Holdings become Haranga’s largest shareholder with a 13.92% stake and provide funding for completion of a drill program at its flagship Selenge iron ore asset in central north Mongolia.
A drill program was completed in 2011 to define a mineral resource as well as complete the Selenge scoping study in order to obtain a mining licence.
Haranga last week announced an initial JORC-compliant resource estimate for the Bayantsogt target within the Selenge project. The inferred resource is 32.8 million tonnes of iron ore at an average grade of 24.4% iron based on a 15% iron cut-off grade.
The resource is based only on the first pass 35 hole drill program at Bayantsogt with mineralization remaining open in all directions and at depth. The recently discovered high grade zone remains to be properly tested and Haranga expects further drilling will expand the resource and upgrade the resource classification. An exploration target of 120 million to 150 million tonnes has been estimated for the Dund Bulag target, one of four primary targets at Selenge.
The Lippo Group is a major Asian conglomerate with a variety of assets and investments including mineral resources projects in Indonesia, Australia, China, Mongolia and the USA.
Haranga’s managing director Dr Robert Wrixon says the share placement represents a vote of confidence in the company. “It reflects a growing acceptance of the high commercial and strategic value of Haranga’s iron ore assets in Mongolia.” The Lippo Group has agreed to a 12 month lock up period of its 13.92% holding.
“This affirms Lippo’s long term support for Haranga Resources. Haranga now has a blue chip Asian conglomerate as its major shareholder and the company is looking forward to working with the Lippo Group to enhance its future growth trajectory,” says Robert Wrixon.
The Selenge project is a large tenement holding in Mongolia’s premier iron ore province, which is host to the country’s largest iron ore export mine, Eruu Gol.