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RED MOUNTAIN MINING LIMITED Capital/Financing Update 2015
65719_rns_2015-01-18_e66243ee-64bf-4e55-ae82-331910b97766.pdf
Capital/Financing Update
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ASX ANNOUNCEMENT RED MOUNTAIN MINING LTD (ASX:RMX) 19 JANUARY 2015
STRATEGIC FINANCING COMMENCED AND WORK PROGRAM UNDERWAY
- Due diligence completed under the Agreement with Bluebird Merchant Ventures Ltd
- First US$200,000 of Stage 1 US$1million funding part paid to Red Mountain subsidiary
- Program of exploration and final mine permitting underway
- Final stage of Definitive Feasibility Study (DFS) commencing
Perth, Western Australia: Red Mountain Mining Limited (the Company, ASX:RMX) is pleased to announce that, following satisfactory completion of due diligence, an initial instalment of US$200,000 (~A$250,000) in Stage 1 funding has been part paid and is expected to be received in full by 23 January 2015 by Red Mountain subsidiary Red Mountain Mining Singapore Ltd (RMMS). The initial instalment is part of the Stage 1 funding totalling US$1 million (~A$1.25 million) under the terms of the binding Strategic Financing Partnership Agreement (the Agreement) with London backed, BVI registered, private company Bluebird Merchant Ventures Ltd (BMVL), announced 23 December 2014.
The US$1 million in Stage 1 funding will be used to complete the Definitive Feasibility Study (DFS), final mine permitting and additional resource/reserve delineation. Following this initial US$200,000 instalment, the remaining US$800,000 (~A$1 million) of Stage 1 funding will be paid on Admission of BMVL to the AIM market in London, expected late February 2015, or paid in further US$100,000 monthly payments until Admission. Stage 2 funding of US$4.5 million (~A$5.6 million) is subject to conditions precedent including final mine permitting and completion of the DFS, and will part fund the development of the Batangas Gold Project. The material terms of the Agreement are summarised in the ASX announcements on 16 December 2014 and 23 December 2014.
Red Mountain Managing Director Jon Dugdale said: "We are very pleased to receive the initial funding under the Agreement with BMVL and will immediately commence the work program to complete permitting and the DFS for our Batangas gold project, as well as further testing of high priority, outcropping gold targets at Lobo that may be immediately converted to resources."
The Company has immediately re-commenced excavation to extend the 20m exposed strike length of outcropping high grade gold lode at the south western end of the South West Breccia (SWB) structure (ASX announcement 12 December 2014). The SWB lode is exposed through a window, surrounded by younger limestone, that covers the projections of the lode in all directions (see Figure 1 below).
Previous trenching results from this SWB lode exposure include Trench 32a: 2.5m @ 14.1 g/t Au including 0.5m @ 38.9 g/t Au (ASX announcement 12 December 2014) and Trench 13: 2.6m @ 28.6 g/t Au (ASX announcement 7 January 2014). A previous Red Mountain drillhole, LB 105, intersected 0.65m @ 18 g/t Au from 10m (ASX announcement 23 April 2014), indicating that the high grade lode plunges moderately and may extend down plunge to the southwest, and/or northeast.
The next step will be excavator bulk sampling of the high grade outcropping lode material then drill testing for extensions down plunge to the southwest and northeast. This program has the potential to immediately convert the target to additional resources.
ASX code: RMX COMPANY DIRECTORS CONTACT DETAILS Non-Executive Chairman Non-Executive Director Head Office
ABN 40 119568106 Neil Warburton Michael Wolley RED MOUNTAIN MINING LTD Jon Dugdale Shannon Coates Unit 1, 2 Richardson Street Managing Director Company Secretary West Perth Western Australia 6005 www.redmm.com.au [email protected]
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Figure 1: Trenching and drilling results from SWB lode exposed in Limestone window
The next key step in permitting the Batangas Gold Project will be the receipt of endorsements from the Local Government Units (LGU's), Municipal and Barangay (township) levels, for the development and production plan (Declaration of Mining Project Feasibility (DMPF)). The Company has already gained LGU and regional Mines and Geosciences Bureau (MGB) endorsement for the Social Development Management Plan, a government registered plan that manages community programs and benefits that flow from the future mining operation. LGU endorsement of the DMPF is almost complete, which will allow the permitting process to proceed to the central MGB for final processing and approval.
Based on the encouraging initial DFS results (released 20 November 2014) indicating low capital and operating costs for the initial Batangas Gold Project development, the Company will now proceed with the final, detailed design phase of the DFS, which is targeted to be completed during the first half of 2015. Current high Australian dollar gold price (>A$1,500/oz) and the drop in fuel costs is expected to enhance the economics of the proposed gold project. The DFS program will include additional geotechnical work, including drilling, as well as tailings residue sample testing and additional metallurgical properties testing. Detailed design of the main capital items, including the processing plant, residue storage facility and additional access roads and earthworks will then be completed.
ASX code: RMX COMPANY DIRECTORS CONTACT DETAILS Non-Executive Chairman Non-Executive Director Head Office
ABN 40 119568106 Neil Warburton Michael Wolley RED MOUNTAIN MINING LTD Jon Dugdale Shannon Coates Unit 1, 2 Richardson Street Managing Director Company Secretary West Perth Western Australia 6005 www.redmm.com.au [email protected]
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In parallel with the initial funding under the Agreement, the Company has launched a nonrenounceable pro-rata Rights Issue (Prospectus released 6 January 2015) seeking to raise up to $896,248 before costs. The Prospectus was despatched on Friday 16 January 2015 and should be delivered to eligible shareholders shortly. The closing date for the Rights Issue is 28 January 2015.
For further information about Red Mountain please visit www.redmm.com.au or contact:
| Company Investors: | Media |
|---|---|
| Jon Dugdale | Matt Birney |
| Managing Director | Birney Corporate |
| (+61) 402 298 026 | (+61) 419 217 090 |
| (+61) 8 9226 5668 | (+61)8 9226 5668 |
| E : [email protected] | E : [email protected] |
About Red Mountain Mining Limited and the Batangas Gold Project
Red Mountain Mining (ASX: RMX) is primarily a gold explorer/developer 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 exploration and mining methods and improving efficiencies to gain significant exploration and production upside.
The Company holds a 100% direct and indirect contractual right interest in tenements in the Philippines that contain significant gold resources. Total Mineral Resources at Batangas include Indicated Resources of 2.97 million tonnes @ 2.4 g/t Au, 227,000 oz Au and Inferred Resources of 3.22 million tonnes @ 2.1 g/t Au, 218,000oz Au for a total of 6.19 million tonnes at 2.2 g/t Au, 444,000oz Au (ASX announcement 30 June 2014, JORC 2012). The Company is continuing exploration with the objectives of upgrading Mineral Resources at Batangas.
The Company announced Agreement with London backed, BVI registered, BMVL on 23 December 2014 which includes a two stage funding arrangement totalling US$5.5 million (~A$6.7 million), earning BMVL up to 50% of the currently wholly owned subsidiary, Red Mountain Mining Singapore Ltd, which is the holder of the Philippines based Batangas Gold Project assets.
Fundign under the Agreement with BMVL will allow the Company to complete a Definitive Feasibility Study (DFS) on the project, with initial results confirming low capital and operating costs and recovery of over 100,000 ounces of gold during the initial 5 years of production (ASX announcement 20 November 2014).
Final mine development permitting submissions have been lodged with the Philippines Government (ASX announcement 3 April 2014) and are proceeding towards approval.
Other gold opportunities will be reviewed on a continuous basis.
ASX code: RMX COMPANY DIRECTORS CONTACT DETAILS Non-Executive Chairman Non-Executive Director Head Office Jon Dugdale Shannon Coates Unit 1, 2 Richardson Street
ABN 40 119568106 Neil Warburton Michael Wolley RED MOUNTAIN MINING LTD Managing Director Company Secretary West Perth Western Australia 6005 www.redmm.com.au [email protected]
Cautionary Statement
The production targets referred to in this announcement were released to ASX on 20 November 2014. They are preliminary and there is no certainty that the production targets or the forecast financial information derived from the production targets, will be realised. All material assumptions underpinning production targets or forecast financial information derived from production targets continue to apply and have not materially changed.
Competent Person Statement
The information in this report relating to Exploration Results and Mineral Resources 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 2012 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. The Company confirms that the form and context in which Exploration Results and Mineral Resources are presented has not been materially modified and it is not aware of any new information or data that materially affects the information included in the relevant market announcements, as detailed in the body of this announcement. All material assumptions and technical parameters underpinning the Mineral Resource estimates continue to apply and have not materially changed.
Forward Looking Statements
This announcement contains certain forward looking statements. These forward-looking statements are not historical facts but rather are based on Red Mountain Mining's current expectations, estimates and projections about the industry in which Red Mountain Mining operates, and beliefs and assumptions regarding Red Mountain Mining's future performance. Words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates" "potential" and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors, some of which are beyond the control of Red Mountain Mining, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Red Mountain Mining cautions shareholders and prospective shareholders not to place undue reliance on these forward-looking statements, which reflect the view of Red Mountain Mining only as of the date of this presentation. The forward-looking statements made in this release relate only to events as of the date on which the statements are made. Red Mountain Mining will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances or unanticipated events occurring after the date of this presentation except as required by law or by any appropriate regulatory authority.
ASX code: RMX COMPANY DIRECTORS CONTACT DETAILS Non-Executive Chairman Non-Executive Director Head Office Jon Dugdale Shannon Coates Unit 1, 2 Richardson Street
ABN 40 119568106 Neil Warburton Michael Wolley RED MOUNTAIN MINING LTD Managing Director Company Secretary West Perth Western Australia 6005 www.redmm.com.au [email protected]
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