Red Mountain Mining (ASX:RMX) is gearing up to drill test a new target for a possible repeat of the high-grade gold South West Breccia, which is on the Lobo prospect, and part of the company's Batangas Project in the Philippines.
To fund the new program, Red Mountain is offering a Share Purchase Plan which could raise up to $1 million.
PAC Partners Pty Ltd is showing support, and has underwritten $600,000 of the offer.
Jon Dugdale, managing director, commented: “The exceptional results produced last year around Japanese Tunnel and through to Trench 13, led us to believe that the main SWB lode extended in that direction.
“Tamarind is quite significant for us however because it has changed our view about which direction the main South West Breccia lode extends.
“Our geological team has now interpreted that the Japanese Tunnel - Trench 13 zone may actually only be a fault offset of the main SWB lode, potentially represented by the Tamarind target in the footwall.
“We are very keen to drill this target, as it lines up really well with the main, high-grade SWB resource and the soil anomaly is just as big, if not bigger than SWB.”
Share Purchase Plan details
The plan provides the opportunity for eligible Red Mountain shareholders to subscribe for up to $15,000 worth of new fully paid ordinary shares.
The issue price of the new shares will be determined at the issue date of the new shares under the plan.
It will be based on a 20% discount to the volume weighted average price of the company’s shares traded on the ASX during the 5 days immediately prior to the issue date.
Analysis
The new funds will be used for further exploration at Batangas with a high impact drilling program scheduled to commence in August/September 2015.
This will deliver assay newsflow in early Q4.
Key catalyst:
Following the drilling, a new resource will be calculated and used in the Definitive Feasibility Study.
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