Tempest Minerals Ltd (ASX:TEM)’s $1 million seed funding investment in Tolu Minerals Ltd, (formerly Lole Mining Ltd) – could be money well spent as Tolu looks to raise between $10 million and $15 million at an issue price of $0.50 to list on the ASX this month.
TEM invested in Tolu at an issue price of A$0.37 to assist in the acquisition of the flagship Tolukuma Gold Mine, giving it commercial exposure to the Papua New Guinea (PNG) focused company and a strong position in a near-term gold producer.
Tolu is pursuing several high-grade gold opportunities in PNG including the Mt Penck epithermal gold exploration project and the flagship Tolukuma Gold Mine.
Tolukuma is a previously operating high-grade gold mine with existing processing plant and infrastructure and large surrounding exploration portfolio. The mine produced very high-grade gold in the 1990s and 2000s with a substantial historic production record.
It has an initial inferred resource of 1.61 million tonnes at 10 g/t gold and 38 g/t silver for 503,000 ounces.
Financial strength
TEM’s investment in Tolu is one of several public and private initial positions in the 2022 pre-IPO capital raising in Tolu and TEM will remain a notable shareholder of Tolu after the IPO.
Tolu has a clear strategy to restart Tolukuma before the end of 2023.
In doing so, TEM would also gain leverage to the wider Tolukuma area resource and infrastructure which Tolu is looking to turn into a large, world-class gold mining project.
Meanwhile, TEM continues to work on its diversified portfolio of precious, base and energy metals projects in Western Australia.