INDOCHINE Mining will use around Aus$6 million raised in a 2 for 5 pro-rata non-renounceable entitlement offer to commence construction of an underground adit at Mt Kare Gold-Silver Project. The adit will enable Indochine to seek to achieve its near term target of defining 1 million ounces of gold at a grade of 10 grams/tonne gold.

Indochine Mt Kare 

An Indochine Mining field team on the Mt Kare project with the camp site in the background.

The total, including an accelerated component of $5.6 million, has been raised from existing eligible shareholders.

The JORC-compliant high grade resource at Mt Kare stands at 1.4 million tonnes @ 10 grams/tonne gold and 52 grams/tonne silver for 466,000 ounces of gold, within a larger total resource of 2.1 million gold ounces and 18 million silver ounces.

The shortfall component under the offer amounted to approximately $18.6 million. The Indochine directors may, subject to the requirements of the Listing Rules and the Corporations Act and in accordance with the offer document, place the shortfall within the next three months at a price no less than $0.07, the issue price of new shares under the offer. The company is encouraged by a number of investors that have expressed an interest in the High Grade Mt Kare Gold Project following marketing of its new development strategy.

Initial development work included horizontal drill holes and a laydown area for the portal development. This will be followed by a larger underground drilling campaign, targeted to increase the high grade gold zones to more than 1 million ounces @ 10 grams/tonne gold during the June quarter of 2014. The adit will access two high grade gold zones in the WRZ North and BZ zones. Bulk sampling for bankable results will also be undertaken.

Indochine is targeting high margin, low cost annual production of 150,000 to 200,000 ounces in 2015 with a capex target of less than $100 million. The company has also undertaken a secondary listing on the Port Moresby Stock Exchange, demonstrating its confidence in PNG’s mining sector and investment community.

Indochine’s chief executive officer Stephen Promnitz says, “In the current market, we are encouraged to have secured the continued support of our investors, particularly some of the larger funds on our register, who recognized the unlocked value in the high grade project. Our immediate focus is to develop this exploration adit so we can more cost effectively increase our high grade resource base.”

Meantime, Indochine has signed a heads of agreement with Capital Mining to acquire up to 85% of the Cambodian exploration assets, in return for 40% equity in Capital and sole funding $10,000 on the projects over maximum term of 3 years. The agreement is subject to certain conditions, including due diligence and raising capital.

An Indochine Mining field team on the Mt Kare project with the camp site in the background.

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