Alara Resources (ASX:AUQ) has moved to further strengthen the economic feasibility of its Washihi and Daris copper-gold projects in Oman with a rights issue targeting A$2.5 million in funding.
The offer will be priced at $0.01 per share, being a discount of 50% to the one-month volume-weighted average price of $0.02.
This will be partially underwritten by Patersons Securities for $500,000.
Funds raised from the issue will be used primarily to extend JORC resources for Washihi and Daris, where copper and gold grades are targeted to range as high as 5% and 1.5g/t, respectively.
Alara confirmed earlier this week that feasibility work at its Oman properties was progressing on time and within budget, flagging a three-stage mine development with a total of 9.37 million tonnes in pit resources and aims to deliver 11 years of production.
This three stage pit plan also offers flexibility to mine higher grades in the first 7 to 8 years.
Costs are expected to be controlled by the fact that no additional material, other than the pre-strip material will be needed to build the tailings dam.
Also, the low-cost of diesel and competitive wage structure of Oman is expected to help maintain a low-cost mining regime.
Assessment of civil, structural and electrical work is expected to be completed by the end of October.
Process water and power requirements have been determined and circulated for design and pricing. Initial indications are that the water pipe line can be built at below scoping estimates.
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