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RED MOUNTAIN MINING LIMITED — Capital/Financing Update 2013
May 14, 2013
65719_rns_2013-05-14_f3234e95-404b-4fa4-abe3-0da6733ff7d5.pdf
Capital/Financing Update
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15 May 2013
ASX ANNOUNCEMENT
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RED MOUNTAIN CAPITAL RAISING TO FUND DRILLING OF IDENTIFIED HIGH-GRADE GOLD TARGETS AND SCOPING STUDY
Perth-based Red Mountain Mining Limited (ASX: RMX) (“the Company”, “Red Mountain”) is pleased to announce a proposed capital raising to raise up to A$2.8 million (before costs) to primarily fund drilling of identified high grade targets and with the aim of expanding on the existing gold mineral resources at its wholly owned Batangas gold project, 120 kilometres south of Manila, in the Philippines.
Red Mountain intends to conduct a pro-rata, renounceable rights issue on the basis of three (3) new shares for every two (2) shares held by shareholders on the record date at an issue price of A$0.01 (1 cent) per new share with one (1) free attaching “Short Dated” option, exercisable at A$0.015 (1.5 cents) each on or before 30 June 2014, for every two new shares subscribed for, and one (1) free attaching “Long Dated” option, exercisable at A$0.03 (3 cents) each on or before 30 June 2016, for every four (4) new shares subscribed for to raise up to approximately $2,813,580 (before costs) (“Rights Issue”).
Patersons Securities Limited (“Patersons”) has been appointed as Lead Manager and the Rights Issue will be partially and conditionally underwritten to $550,000. Red Mountain Directors Mr Neil Warburton and Mr Keith Rowe have indicated they intend to take up their full rights entitlements and will partially sub-underwrite the Rights Issue.
Red Mountain’s Managing Director, Mr Jon Dugdale, commented: “The Red Mountain offer is at an attractive price for our shareholders and is designed to secure the future of the Company and enhance our short-to-medium term objectives for the high-grade Batangas gold project.”
“If fully subscribed, the majority of the approximately $2.8 million in funds raised from the Rights Issue will be used to fund immediate drilling into the high-grade, near surface, gold discoveries at our Lobo project at Batangas, and target a resource upgrade and positive scoping study into a future gold producing project.”
Batangas comprises two key gold prospects, Archangel and Lobo, which have combined JORC Mineral Resources estimates of 5.78 million tonnes at 2.2 grams per tonne gold (g/t Au) for 408,000 oz gold and at 3.3 g/t silver (Ag) for 606,000 oz silver.
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ASX code: RMX ABN 40 119568106
COMPANY DIRECTORS Neil Warburton Non Executive Chairman Jon Dugdale Managing Director Keith Rowe Non Executive Director
CONTACT DETAILS Michael Wolley RED MOUNTAIN MINING LTD Non-Executive Director Head Office Shannon Coates Unit 1, 2 Richardson Street Company Secretary West Perth Western Australia 6005 www.redmm.com.au [email protected]
Red Mountain has recently discovered four new, high-grade, near surface, epithermal gold vein zones at Lobo, Batangas, that will be the focus of further drilling with the objective of upgrading gold Mineral Resources and significantly enhancing the economics of a potential gold operation at the project.
Pro-Rata Renounceable Rights Issue
Red Mountain intends to lodge a transaction specific Prospectus for the Rights Issue with the ASIC and ASX on or around 16 May 2013.
Patersons has been appointed Lead Manager to the proposed Rights Issue. The Rights Issue will be partially and conditionally underwritten to $550,000. Pursuant to its Mandate with Patersons, the underwriter or its nominees will be entitled to one (1) “Long Dated” option, exercisable at $0.03 (3 cents) each on or before 30 June 2016, for every two (2) shares of underwriting committed. The Company intends to seek shareholder approval for this issue to preserve its 15% placement capacity.
Proposed Capital Structure
On completion of the above mentioned Rights Issue, assuming full take up, the Company’s capital structure is expected to be as follows:
| Description | Shares | Existing Options |
Short-Dated Options |
Long-Dated Options |
Gross Amount Raised |
|---|---|---|---|---|---|
| Existing | 187,572,0261 | 44,446,5582 | |||
| Rights Issue Shares |
281,358,039 | 140,679,020 | 70,339,510 | $2,813,580 | |
| Underwriter Commitment Options |
27,500,000 | ||||
| Capital Structure on completion of capital raising |
468,930,065 | 44,446,558 | 140,679,020 | 97,839,510 | $2,813,580 |
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The Company also has 50,000,000 performance shares on issue (conversion subject to performance based conditions by 30 October 2013. See Company’s ASX announcement dated 30 October 2012).
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The Company currently has 44,446,558 unlisted options with varying terms on issue.
Use of Funds
It is intended that the majority of funds raised through the Rights Issue will be used to test identified high-grade gold targets at Lobo, Batangas and, if funds allow, to complete a scoping study into a potential future gold operation at the project:
COMPANY DIRECTORS Neil Warburton Non Executive Chairman Jon Dugdale Managing Director Keith Rowe Non Executive Director
CONTACT DETAILS Michael Wolley RED MOUNTAIN MINING LTD Non-Executive Director Head Office Shannon Coates Unit 1, 2 Richardson Street Company Secretary West Perth Western Australia 6005 www.redmm.com.au [email protected]
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ASX code: RMX ABN 40 119568106
| Funds Available | Minimum Subscription Full Subscription |
|---|---|
| Cash on hand Funds raised under the Offer1 Total funds available |
$500,000 $500,000 $550,000 $2,813,580 |
| $1,050,000 $3,313,580 |
|
| Use of Funds | |
| Drilling high-grade gold targets at Batangas Gold Project: Lobo and Archangel prospects Undertake preliminary scoping study into a gold project development at Batangas Gold Project General working capital Estimated expenses of the Offer Total |
$500,000 $1,500,000 $0 $300,000 $410,000 $1,220,580 $140,000 $293,000 |
| $1,050,000 $3,313,580 |
1. Minimum Subscription of Offer has been conditionally underwritten.
About the Batangas Gold Project
The “flagship” Batangas Gold Project is located 120km due south of Manila in the Philippines and comprises 270km² of tenements, mostly granted Exploration Permits, and two granted Mineral Production Sharing Agreements (MPSA’s) – the equivalent of “mining licences” over the Lobo and Archangel resources and exploration target areas.
Mineral Resources estimates for the Batangas gold project are a combined 5.78 million tonnes at 2.2 grams per tonne gold (g/t Au) for 408,000 oz gold and 3.3 g/t silver (Ag) for 606,000 oz silver at a 0.85 g/t Au cut off grade, as tabulated below:
| Cut- Off g/t Au |
|||||||
|---|---|---|---|---|---|---|---|
| Resource Category |
Au g/t |
Ag g/t |
|||||
| Deposit | Tonnes | Au Oz | Ag Oz | ||||
| Inferred | 0.85 | 3,004,000 | 2.0 | 197,000 | 1.3 | 124,000 | |
| Archangel | Indicated | 0.85 | 2,582,000 | 2.0 | 165,000 | 5.7 | 471,000 |
| *Total | 0.85 | 5,586,000 | 2.0 | 363,000 | 3.3 | 595,000 | |
| Inferred | 0.85 | 16,000 | 5.3 | 3,000 | 1.9 | 1,000 | |
| SWB | Indicated | 0.85 | 178,000 | 7.4 | 42,000 | 1.8 | 10,000 |
| *Total | 0.85 | 194,000 | 7.2 | 45,000 | 1.8 | 11,000 | |
| Total Inferred | 0.85 | 3,020,000 | 2.1 | 200,000 | 1.3 | 125,000 | |
| Batangas | Total Indicated |
||||||
| 0.85 | 2,760,000 | 2.3 | 208,000 | 5.4 | 481,000 | ||
| *Total | 0.85 | 5,780,000 | 2.2 | 408,000 | 3.3 | 606,000 |
The bulk of resources are at Archangel where at surface stockwork gold mineralisation hosted by shallow dipping andesitic volcanics remains open to the east and west (e.g. trenching to 18.3m @ 3.78 g/t Au ) and at depth 2.2m @ 36.5 g/t Au from 203m.
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ASX code: RMX ABN 40 119568106
COMPANY DIRECTORS Neil Warburton Non Executive Chairman Jon Dugdale Managing Director Keith Rowe Non Executive Director
CONTACT DETAILS RED MOUNTAIN MINING LTD Head Office Unit 1, 2 Richardson Street West Perth Western Australia 6005 www.redmm.com.au [email protected]
Michael Wolley Non-Executive Director Shannon Coates Company Secretary
However, the primary focus is to upgrade the mineral resources through drilling highgrade targets at Lobo, where five-parallel lode structures totalling over 15 km strike length, including four new, at surface, gold “discoveries” have been identified:
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i) Ulupong vein: surface sampling along the vein assayed 19m @ 9.77 g/t Au incl. 7m @ 23.58 g/t Au .
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ii) Japanese Tunnel: near South West Breccia (Indicated and Inferred resource from surface of 194,000t @ 7.2 g/t Au, 45,000oz Au ), surface trenching results of 5m @ 10.43g/t Au incl. 1m at 25.14 g/t Au and 2m @18.12 g/t Au , incl. 1m @ 28.69g/t Au .
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iii) Pica: drilling intersected 5m at 4.28 g/t Au , 15.75 g/t silver (Ag) from 22.4m downhole, incl. 1.3m at 9.49 g/t Au and 21.5 g/t Ag and
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iv) West Drift: drilling results including 6m @ 8.03 g/t Au from 197.8m downhole including 4m @ 11.18 g/t Au and 5.2m @ 6.05 g/t Au from 138.25m incl. 1.05m @ 16.97 g/t Au have defined a shallow plunging shoot of mineralisation that is open to the northeast and southwest. Resource modelling is in progress.
It is intended that drilling of these targets will re-commence following completion of the Rights Issue capital raising.
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Figure 1: Plan of Lobo Epithermal Lode Structures and High-Grade Targets
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ASX code: RMX COMPANY DIRECTORS ABN 40 119568106 Neil Warburton Non Executive Chairman Jon Dugdale Managing Director Keith Rowe Non Executive Director
Michael Wolley Non-Executive Director Shannon Coates Company Secretary
CONTACT DETAILS RED MOUNTAIN MINING LTD Head Office Unit 1, 2 Richardson Street West Perth Western Australia 6005 www.redmm.com.au [email protected]
MEDIA CONTACT:
______________ Jon Dugdale Kevin Skinner Managing Director Field Public Relations (+61) 402298026 (+61) 414822631 (+61) 8 9226 5668 (+61) 8 82349555
About Red Mountain Mining Limited
Red Mountain Mining (ASX: RMX) is primarily a gold explorer and project acquisition company which listed on the ASX in September 2011. The Company’s strategy is to unlock the potential of ‘under-developed’ gold and polymetallic projects in the greater Asian region by introducing Australian mining methods and improving efficiencies to gain significant production and exploration upside.
The Company completed the acquisition of significant gold resources and copper gold tenements in the Philippines on 30 October 2012. Since acquisition the company has focussed on upgrading the Batangas resources through discovery of new, high grade, gold zones at Archangel, and Lobo (eg West Drift, Pica, Ulupong). The company will continue drilling with the objective of increasing the size and grade of JORC compliant Mineral Resources at Batangas then completing a scoping study to demonstrate the viability of a potential high-margin gold project development.
Other gold opportunities will be reviewed on a continuous basis.
Competent Person Statement
The information in this report relating to Exploration Results is based on information compiled by Mr Jon Dugdale who is a Fellow of the Australasian Institute of Mining and Metallurgy and has sufficient exploration experience which is relevant to the various styles of mineralisation under consideration to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Dugdale is a full time employee and Managing Director of Red Mountain Mining Ltd. Mr Dugdale consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The information in this report relating to Mineral Resources is based on information compiled by Mr Ted Coupland who is a member of the Australasian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the various styles of mineralisation under consideration to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Coupland is a former full time employee of Cube Consulting Pty Ltd. Mr Coupland consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
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ASX code: RMX ABN 40 119568106
COMPANY DIRECTORS Neil Warburton Non Executive Chairman Jon Dugdale Managing Director Keith Rowe Non Executive Director
CONTACT DETAILS RED MOUNTAIN MINING LTD Head Office Unit 1, 2 Richardson Street West Perth Western Australia 6005 www.redmm.com.au [email protected]
Michael Wolley Non-Executive Director Shannon Coates Company Secretary