Red Mountain Mining (ASX:RMX) has secured access to standby equity capital of up to $3 million to continue drill testing the five new priority targets at the Lobo Prospect in the Philippines.
The Controlled Placement Agreement with Acuity Capital Investment Management grants the company access to funds over 12 months to 28 July 2015.
Red Mountain retains full control of the placement process, with sole discretion as to whether or not to utilise the CPA.
There are also no restrictions or conditions on other capital raising activities the company may wish to undertake.
This provides it with the flexibility to quickly and efficiently raise capital, including the ability to take advantage of suitably attractive opportunities if they arise.
“This CPA Agreement provides maximum flexibility for Red Mountain to manage its capital requirements,” managing director Jon Dugdale said.
“We have total control over whether we utilise the program, and the company can specify the period and the minimum price requirements.
“At all times Red Mountain can control the maximum number of shares that are issued, thereby minimising the cost of capital and dilution for existing shareholders.
“It allows the company to quickly and efficiently raise capital and potentially accelerate drilling of the five new priority target areas at Lobo.”
Controlled Placement Agreement
Under the agreement, Red Mountain has up to $3 million of standby equity capital available to 28 July 2015.
The company has the right to determine following parameters:
- Maximum Placement Amount to be issued for any particular placement period, minimising dilution of existing shareholders;
- Floor Price, being the minimum issue price for that Placement Period, and
- Placement Period, being the date(s) over which the VWAP and placement price is calculated. Each new placement is issued at a 10% discount to a volume weighted average price (VWAP) over the Placement Period, subject to the Floor Price determined by the company;
In addition, there are no fees for Red Mountain entering into the CPA and there are no options required to be issued.
Lobo Drilling
Red Mountain has started drilling at the Camo target, one of the five it is planning to drill.
Drilling will test previous exciting rock chip sampling and trenching results including:
- 729g/t silver, 1.45g/t gold and 4.4% copper;
- 487g/t silver, 1.45g/t gold and 1.09% copper; and
- 4 metres at 379g/t silver, 2.0g/t gold and 0.62% copper.
It will define strike extremities of the near surface high-grade silver, copper and gold siliceous lode; and trace the down-plunge projection of the lode into the potential high grade gold or “boiling” zone.
Camo is located about 1.2 kilometres along strike northeast of the high grade South West Breccia (SWB) resource and is associated with an identical flexure or bend in the structure to SWB.
Drilling
The facility could accelerate drilling of the five new priority targets at the Lobo Prospect of its Batangas Project.
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