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REDSTONE RESOURCES LIMITED Capital/Financing Update 2012
65676_rns_2012-10-03_1d7b2b91-41af-4838-97b3-2900886d9ca1.pdf
Capital/Financing Update
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ASX ANNOUNCEMENT 4 October 2012
REDSTONE'S 100% AUSTRALIAN TOLLU COPPER NICKEL PROJECT TO ENTER NEXT PHASE OF EXPLORATION AFTER SUCCESSFUL CAPITAL RAISING AND SECURING SUPPORT OF NEW CORPORATE ADVISOR
- Redstone raises $2m to fund exploration on its highly prospective Tollu project
- Placement heavily oversubscribed
- Redstone to now demonstrate the upside potential and scale of the Company's high grade hydrothermal copper-nickel discovery
- Argonaut appointed as Redstone's corporate and financial advisor
Redstone Resources Limited (ASX Code: RDS) ("Redstone" or "the Company") is pleased to announce that it has received binding commitments in respect of a placement of 20 million fully paid ordinary shares in the Company at $0.10 per share ("Shares"), with an additional 1:2 option exercisable at $0.20 on or before 28 February 2016 ("Option"), to raise $2 million (before costs) ("Placement").
Argonaut is lead manager to the Placement.
Funds raised under the Placement will be used to advance exploration at the Company's flagship Tollu exploration project in Western Australia.
Redstone's Chairman, Richard Homsany, welcomed new shareholders to the Redstone register and noted that with the desired funds now secured, the Company will embark on the task of expanding the current mineral endowment and demonstrating the extensive exploration potential at the Tollu property.
"We are extremely pleased with the investor response to this capital raising. The level of interest in the capital raising indicates in our view that the investment community recognises the huge potential that exists at our West Musgrave properties and Tollu in particular."
New Corporate Advisor
The Company is also delighted to announce its partnership with Argonaut as its new corporate and financial advisor. Argonaut is a Western Australian based corporate advisory firm and investment house which specialises in investment in the mining and resources industry. Redstone believes that securing the support of Argonaut will have significant benefits in developing its story and communicating it to the capital markets and investment community.
Argonaut's strong institutional and high wealth client base and deep industry experience will be of particular benefit in achieving better recognition of the value inherent at Tollu, which the Company believes is significant and unrealised by the market.
Project Update
Redstone has spent the past two years confirming its geological model at Tollu and has demonstrated a high grade copper system extending to depths of over 350m. The Company intends for the next 6 months to focus on low cost exploration methods which illustrate potential lateral extents of high grade copper mineralisation. The Company's aim is to prove that mineralised zones on surface cover a much greater area than that explored and drilled by the Company to date.
The conceptual model of the Tollu project suggests a hydrothermal Cu rich mineralised system which is derived from a typical Voisey's Bay Style magmatic Cu-Ni-(Co) system at depth. The Tollu project's conceptual model can be represented by Figure 1.
On the Company's ~2,200km2 of tenements, the Company has explored less than 5%. Similarly, less than 2% of that 5% has been drilled. Figure 2 illustrates the limited nature of the Company's exploration to date.
Figure 2 – Location of Tollu Exploration and Drilling Zones
Drilling at the Central Zone (Subzone 1) of the Tollu Project has established the existence of a significant mineralised body with exceptional results that provide an average Cu grade exceeding 2.6%. The Company also has obtained intercepts exceeding 5.0% Cu. Figure 3 shows an example cross section of Tollu mineralisation.
Figure 3 - Cross-section of Tollu mineralisation – Section 7108550N
Redstone Resources Limited ABN 42 090 169 154 www.redstone.com.au Suite 3, 110-116 East Parade, East Perth WA 6004 Tel: 08 9328 2552 Fax: 08 9328 2660 Email: [email protected] The Company's Tollu Project has visible copper outcropping mineralisation over much of its large scale tenements. Given the limited exploration undertaken by Redstone over this area, the potential for the Company to demonstrate large scale repeatability of its drilling programme to date exists. The Company is aiming to establish this repeatability over a number of target zones across Tollu, as indicated by Figure 4 below. The zones highlighted in red in Figure 4 indicate largely untested zones whereas the area circled in green indicates the Central Zone, which to date has been the focus of Redstone's drilling.
Figure 4 - Geology at Tollu demonstrating repeatability and scale of the largely untested zones (illustrated in red (Central Zone in green))
The Placement
The Placement will proceed in two tranches, with the first tranche comprising approximately 11.6 million Shares and 5.8 million Options. The second tranche, which is subject to the approval of the Company's shareholders, comprises approximately 8.4 million Shares and 4.2 million Options and is also strongly supported by the Company's directors and management.
Shares and Options issued under tranche 1 will be issued under the Company's 15% issuing capacity under ASX listing rule 7.1. Shareholder approval for the issue of the second tranche of Shares and Options will be sought at the Company's annual general meeting to be held in November.
An indicative timetable for the Placement is set out below.
Offer Summary
| Indicative Timetable | Date (2012) |
|---|---|
| Placement Announcement and Trading Halt Lifted | Thursday 04 October |
| Settlement of Placement for Tranche 1 | Tuesday 09 October |
| Shares issued under Tranche 1 | Wednesday 10 October |
| Redstone's Annual General Meeting held (Tranche2 Approval) | Thursday 29 November |
| Settlement of Placement for Tranche 2 | Settlement will occur as soon as practicableafter shareholder approval is obtained at theCompany's AGM. |
| Allotment and trading of Tranche 2 Shares | The day following Settlement of Tranche 2 |
For further information please contact:
| Anthony Ailakis | Miranda Conti |
|---|---|
| Executive Director | Company Secretary |
| Redstone Resources Limited | Redstone Resources Limited |
| +61 (08) 9328 2552 | +61 (08) 9328 2552 |
| [email protected] | [email protected] |
About Redstone Resources Limited
Redstone Resources Ltd is a Perth-based company focused on nickel and copper with a portfolio of highly prospective mineral exploration properties in the West Musgrave region of WA and also in Brazil.
About the Tollu Project
The Tollu Project is located within the West Musgrave Region of Western Australia. A number of mineral occurrences are associated with intrusion-hosted Ni-Cu-PGE deposits and Ni-Co laterite deposits within the region.
Tollu is a hydrothermal Cu-rich mineralised system which is considered to represent the distal part of a Voisey's Bay Style magmatic Cu-Ni-(Co) system. Key indicators that support a mafic primary source of mineralising fluids in accordance with this model include the extent and volume of remobilised copper sulphides, hydrothermal copper sulphide mineralisation and the association of mineralisation with cobalt.
The geological evolution of Tollu is interpreted as follows:
- The ultramafic Giles Complex (1070Ma) intruded layered volcanic host rocks of the Tollu Group (1100Ma). This complex is the source of Ni-Cu-(Co) magmatic mineralisation which gave rise to known mineral deposits in surrounding properties throughout the region.
- The Peterman Orogeny (550Ma) provided the structural setting for the development of regional strike-slip faults and associated dilational/en-echelon structures. These structures provided favourable pathways for hydrothermal fluids to migrate from deeper mafic source rocks into the overlying layered felsic volcanics of the Tollu Group.
- The Tollu Group provided the source of sulphur to assist chalcopyrite and bornite deposition during fluid mixing/wall rock interaction from deeper fluids. This interaction resulted in a rich swarm of hydrothermal veins dominated by Cu mineralisation with Co association at depth. Mineralisation is hosted both within steep N-S structures and parallel sets of dilatational/en-echelon structures throughout the property.
The project area hosts a giant swarm of hydrothermal copper rich veins as part of a 700-800m wide mineralisation corridor that extends over an area of at least 6km2 . Copper mineralisation comprises an oxidised assemblage of malachite, tenorite, cuprite and azurite within quartz veins to vertical depths between 30 to 80m. Quartz veins also display boxwork textures in areas of pervasive copper oxide mineralisation.
Oxide zones transition into sulphide mineralisation consisting of chalcopyrite, minor bornite and chalcocite veins. These veins are demonstrated to be continuous to vertical depths exceeding 350m based on the current limits of drilling at Tollu. Veins are repeated via en-echelon structures within the broader structural corridor which represent additional targets for copper mineralisation.
The information in this report that relates to exploration results is based on information compiled by Dr Joao Orestes Santos, a part-time employee of Redstone Resources Limited. Dr Santos is a member of the Australian Institute of Geoscientists and has sufficient experience relevant to the style of mineralisation under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves'. Dr Santos consents to the inclusion in the report of the matter based on his information in the form and context in which it appears.