TIDMMNC
RNS Number : 4076P
Metminco Limited
17 November 2016
ASX ANNOUNCEMENT 17 November 2016
METMINCO SECURES A$4.85 MILLION FOR COLOMBIAN GOLD FEASIBILITY
STUDY
Metminco Limited ("Metminco" or the "Company") (ASX: MNC; AIM:
MNC) is pleased to announce that it has secured funding commitments
of approximately A$4.85 million (the Capital Raising) which will be
used to complete the Miraflores Feasibility Study and progress the
project towards production.
The Placing
A total of 2,058,619,651 new fully paid ordinary shares (Shares)
will be placed with institutions and sophisticated and professional
investors at a price of A$0.00237 (GBP 0.0014) per Share to raise
approximately A$4.85 million.
A total of 212,628,089 Shares will be placed with sophisticated
and professional investors under ASX Listing Rule 7.1 and 7.1A. The
remainder will be placed with Redfield Asset Management (Redfield),
William Howe, the Company's Managing Director and UK based investor
Lanstead Capital LP (Lanstead), subject to shareholder approval at
a General Meeting of shareholders to be held on or about the 20
December 2016.
It is expected that trading of 212,628,089 Shares will commence
on the ASX and admission to AIM will become effective on or around
23 November 2016. Following this issue of the Shares the Company
will have 4,513,903,858 Shares on issue.
Use of Funds
The proceeds from the Capital Raising will be applied to
expenditure related to the Company's objective of developing the
Quinchia Gold Portfolio, in particular advancing the Miraflores
Project towards gold production through a Feasibility Study,
anticipated to be completed in the first half of 2017, permitting
and working capital.
It is forecast the Capital Raising will be sufficient to
complete the Miraflores Feasibility Study, and some but not all of
the permitting including baseline environmental monitoring, which
is expected to be assisted through the lessening of the
environmental footprint of the proposed mine and use of currently
available infrastructure.
Mr William Howe, Managing Director, commented: "We are very
pleased to have attracted long term investors in the capital
raising. Investors with the capacity and commitment to follow their
investment through to gold production.
This successful capital raising represents a strong vote of
confidence in the forecast economics of the Miraflores Project and
the work completed by the Company following acquisition of the
Colombian gold assets. Importantly the Miraflores Project is only
part of the larger Quinchia Gold Portfolio, which has substantial
upside potential including the significant gold porphyry system
targets of Tesorito, Dosquebradas and Chuscal.
In parallel, the Company's shareholders will retain at least a
30% interest in the potential world class Los Calatos copper
project scheduled to have a completed Feasibility Study by 2019
when copper demand is predicted to exceed supply."
Capital Raising
The Capital Raising consists of two tranches. Tranche 1 is a
placement to sophisticated and professional investors of
212,628,089 Shares to raise approximately A$0.5 million under ASX
Listing Rule 7.1 and 7.1A. Tranche 2 consists of placements of
548,523,207 Shares by Redfield to raise A$1.3 million (Redfield
Subscription), 31,645,570 Shares to William Howe to raise A$ 75,000
(Related Party Subscription) and 1,265,822,785 Shares by Lanstead
to raise A$3 million (Lanstead Subscription).
The Company will seek shareholder approval for Tranche 2,
including the Redfield Subscription the Related Party Subscription
and the Lanstead Subscription at a meeting of shareholders
scheduled to be held on or about 20 December 2016. A further
condition of the issue of Shares pursuant to Tranche 2 is that the
Company will obtain shareholder approval to undertake a
consolidation of its securities in a ratio that is not less than
30:1 and not greater than to 50:1. The Notice of Meeting will be
distributed to shareholders in due course.
The Company will apply for quotation of the Tranche 1 Shares
(212,268,089 Shares) to be traded on the ASX and AIM. It is
expected that trading of the Tranche 1 Shares will commence on the
ASX and admission to AIM will become effective on or around 23
November 2016.
Subject to shareholder approval at a General Meeting to be held
on or about the 20 December 2016, the Company will apply for
admission of the Tranche 2 Shares to be traded on AIM and the
ASX.
Sharing Agreement
The Company has also entered into a binding term sheet, subject
to shareholder approval, to enter into a Sharing Agreement with
Lanstead, which enables the Company to secure much of the potential
upside arising from anticipated near term news flow. The Sharing
Agreement provides that the Company's economic interest will be
determined and payable in 18 monthly settlements as measured
against a benchmark price of $0.0032 per Share (the Benchmark
Price). If the Metminco measured share price exceeds the Benchmark
Price, for that month, the Company will receive more than 100 per
cent of the monthly settlement due on a pro rata basis. There is no
upper limit placed on the additional proceeds receivable by the
Company as part of the monthly settlements. Should the measured
share price be below the Benchmark Price, the Company will receive
less than 100 per cent of the expected monthly settlement on a pro
rata basis. In no event would a decline in the share price result
in any increase in the number of Shares received by Lanstead or any
other benefit accruing to Lanstead. The Company has agreed to issue
1,870,902 options to acquire one Share at an exercise price of A$
0.003 per Share expiring 5 years after issue date in consideration
for the Sharing Agreement.
Subject to shareholder approval and following completion of the
Capital Raising, Lanstead will hold 19.9% interest in the Company
and Redfield will hold a 8.6% interest in the Company. All security
numbers quoted above are before the proposed consolidation of the
Company's securities to be considered at the forthcoming
shareholder meeting. Further information will be provided in the
Notice of Meeting.
William Howe
Managing Director
Metminco Limited ABN Suite 401, 6 Help Street,
43 119 759 349 Chatswood NSW, 2067
ASX Code: MNC.AX; AIM Tel: +61 (0) 2 9460 1856;
Code: MNC.L Fax: +61 (0) 2 9460 1857
www.metminco.com.au
For further information,
please contact:
METMINCO LIMITED
Stephen Tainton / Phil Killen Office: +61 (0) 2
9460 1856
NOMINATED ADVISOR AND BROKER
RFC Ambrian
Australia
Will Souter / Nathan Forsyth Office: +61 (0) 2
9250 0000
United Kingdom
Charlie Cryer Office: +44 (0) 20
3440 6800
JOINT BROKER
SP Angel Corporate Finance
LLP (UK)
Ewan Leggat Office: +44 (0) 20
3470 0470
PUBLIC RELATIONS
Camarco
United Kingdom
Gordon Poole / Tom Huddart Office: + 44 (0) 20
3757 4997
------------------------------ --------------------
Notes to Editors
Metminco Limited is an exploration and mining company, dual
listed on the Australian Stock Exchange and London Stock Exchange,
with a portfolio of projects located in Peru, Colombia and Chile.
The Company's focus is advancing its Quinchia gold portfolio in
Colombia and the Los Calatos copper project in Peru. The Company
also has exposure to molybdenum, gold and zinc via its projects in
Peru and Chile.
Quinchia Gold Portfolio (100%)
On 20 June 2016, Metminco acquired Miraflores Compania Minera
SAS (formerly Minera Seafield SAS) for an equity consideration as
well as deferred cash payments payable annually over the following
four years. Miraflores Compania owns 100% of the Quinchia Gold
Portfolio, which is located in Colombia's Middle Cauca Belt and
contains a number of deposits and significant exploration and
development targets including Miraflores, Dosquebradas, Tesorito
and Chuscal. The portfolio has a NI 43-101 estimated Mineral
Resource of 2.8 million ounces of gold.
Miraflores is a near term development opportunity. It has a
Measured and Indicated Mineral Resource of 9.19 million tonnes at
2.81g/t gold and 2.76g/t silver (832,000 oz Au and 817,000 oz Ag).
A recent Scoping Study focussed on an underground operation
producing 50,000 ounces of gold per annum for 9 years. The focus is
now on the conduct of the planned Feasibility Study.
The Los Calatos Project (49%)
Through its wholly owned subsidiary, Minera Hampton Peru SAC,
Metminco holds a 49% interest in Los Calatos, which is located in
Southern Peru near three large operating copper-molybdenum mines,
namely Cuajone, Toquepala and Cerro Verde. Molybdenum constitutes a
significant by-product of copper mining from this belt.
The detailed re-logging program that was conducted on the Los
Calatos drill core in late 2014 and early 2015, resulted in an
estimated mineral resource of 352 million tonnes at a Cu grade of
0.76% and a Mo grade of 318 ppm (2.76mt Cu and 111,936t Mo Metal).
The development prospects of the project have been significantly
enhanced by the agreement signed on 14 June 2016 with CD Capital
Natural Resources Fund III LP to fund the completion of the
Pre-feasibility and Feasibility Studies, and acquire up to 70% of
equity in the project for an investment of up to US$45 million.
As per the Agreement with CD Capital, the Company will use its
best endeavours to distribute at least 90% of its holding in
Hampton Mining (the wholly owned subsidiary holding its interest in
the Los Calatos Project) to its shareholders within six months of
completion of the transaction.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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