Red Mountain Mining Ltd (ASX:RMX) has received strong demand in a top-up capital raising.
Earlier in the month the company outlined that it would raise $275,000 (before costs) from the issue of 275 million shares at 0.1 cents per share.
Demand meant the total raised swelled to $390,000 (before costs).
For every two shares, Red Mountain will issue one new listed option exercisable at 0.15 cents, expiring 31 March 2018.
Funds will be allocated towards its FY17 Q1 (September quarter) expenditure requirements for the Batangas Gold Project joint venture.
Red Mountain holds an interest of 75%, pursuant to the strategic funding agreement with Bluebird Merchant Ventures Ltd.
Adding interest, the recent PFS was based on a gold price of A$1700 an ounce, which is significantly under the last traded price of A$1800 an ounce.
This has the potential to vastly improve the metrics.
Pre-Feasibility Study
Pre-Feasibility Study (PFS) highlights on the Batangas Project, which is located 120 kilometres south of Manila in the Philippines, include:
- Batangas will generate A$46 million in free cash flow during first 7 years of production, after capital and pre-corporate tax and administration at a gold price of A$1,700 ounce;
- Maiden open-pit Ore Reserve of 128,000 ounces of gold, including high-grade 100,000 ounces at 4.2 g/t gold;
- Recovered production of 116,000 ounces of gold, an increase of 26,000 ounces from the Scoping Study;
- Low C1 cash operating costs of US$735 per ounce / A$999 per ounce of recovered gold;
- Low up-front capital costs of US$16 million / A$22 million, including new CIL processing plant;
- Additional 320,000 ounces of gold in majority Inferred Resources remains available for future conversion; and
- Immediate upside potential within the 14 kilometres of identified mineralised structures at Lobo.
Next steps
Red Mountain and Bluebird have approved the PFS and the immediate transition to Definitive Feasibility Study (DFS).
Financing of the project will require a certain level of debt financing, particularly for the new CIL processing plant and associated infrastructure.
Discussions with potential debt financiers are ongoing and will be advanced, targeting financing agreements in parallel with completing the DFS.
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