Red Mountain Mining has signed a binding Strategic Financing Partnership Agreement with London-backed private company Bluebird Merchant Ventures. The financing of US5.5 million (Aus$6.7 million) will be allocated to the Batangas Gold Project 120km south of Manila, with the project now funded until initial development.
Red Mountain has also received firm commitments from professional and sophisticated investors to raise Aus$250,000. The company will also raise up to another $900,000 from a pro-rata, non-renounceable entitlement issue on the basis of one new share for every four, which will also receive the same option deal as the placement.
Red Mountain’s chairman Neil Warburton and managing director Jon Dugdale have indicated they intend to take up at least their full entitlements.
Jon Dugdale says, “We’re very pleased that the strategic financing partnership has been signed and the Batangas Gold Project is now funded to initial development. This agreement is the culmination of many months work and it is very pleasing to see it come together.
“We’ve also been able raise additional capital at Red Mountain parent level and will offer all eligible shareholders the opportunity through the entitlement issue to participate in what will be a very exciting phase for the company, as we head towards becoming a gold producer.”
Red Mountain has recently delivered robust initial results for its definitive feasibility study at Batangas. There is a 5.2 year mining inventory totalling 1.03 million tonnes @ 3.3 grams/tonne gold and 10.3 grams/tonne silver. The production target is 100,000 ounces of gold and 250,000 ounces of silver from processing of 1.03 million ore tonnes.
The first phase of the DFS focused on mining, metallurgy and processing cost and recovery inputs for the initial 5.2 year production target.
The second, 3.25 year production phase will mine transport and process 854,000 tonnes @ 2.6 grams/tonne gold and 12 grams/tonne silver from Kay Tanda West ore body, at Archangel, 15km by road to the east of the Lobo plant.
The production target is underpinned by current, JORC 2012, indicated resources totalling 2.97 million tonnes @ 2.4 grams/tonne gold, containing 227,000 ounces of gold.