Malagasy Minerals has announced plans for a $3.2 million capital raising to step up exploration activities particularly at the company's Ianapera Nickel-Copper-PGE Project in Madagascar.
Malagasy Minerals has announced plans for a $3.2 million capital raising to step up exploration activities particularly at the company's Ianapera Nickel-Copper-PGE Project in Madagascar.
The raising will comprise a $1.1 million share placement at 6.8 cents per share and a fully underwritten 1-for-4 non-renounceable entitlement issue at the same price to raise $2.1 million.
Malagasy's managing director Steve Goertz, said the capital raising would enable the Company to significantly expand its exploration efforts in Madagascar.
He said substantial drilling and exploration is planned next year across its key projects.
"We are very excited about the potential of both the Ampanihy and Vohibory Projects, and we expect to be in a position to refine our exploration targeting significantly as a result of the initial drilling undertaken this year," Mr. Goertz said.
See company statement below:
International minerals company Malagasy Minerals Ltd (ASX Code: MGY) is pleased to announce a $3.2 million capital raising comprising a $1.088 million share placement to institutional and sophisticated investors and a fully underwritten 1-for-4 non-renounceable entitlement issue to existing and new shareholders to raise $2.129 million.
The proceeds of this capital raising will be used to accelerate drilling and exploration programs at the Company's key nickel-copper-PGE and VMS-style copper-silver-gold projects in Madagascar, off the coast of southern Africa.
In particular, the raising will enable Malagasy to step up its exploration activities at the Ianapera Nickel-Copper-PGE Project (part of its Ampanihy Project) in southern Madagascar, where it has recently intersected massive sulphides in initial drill holes and is continuing exploration, targeting a large-scale mineralized system.
Capital Raising Overview
The capital raising will be undertaken at a price of 6.8 cents per share and will comprise:
a share placement to institutional and sophisticated investors comprising 16 million shares to raise gross proceeds of $1.088 million; and
a 1-for-4 fully underwritten non-renounceable pro-rata entitlement offer to existing and placement holders to raise gross proceeds of approximately $2.129 million.
A Prospectus for the entitlement issue has been lodged with ASIC and will be dispatched to shareholders on 6 December 2010, following the RECORD DATE of 3 DECEMBER 2010.
Leading Australian broking firm Patersons Securities Limited has been appointed as Lead Manager to the placement and Lead Manager and Underwriter of the entitlement offer.
Use of Funds
The funds raised through the placement and entitlement issue will be used to accelerate exploration activities within the Company's high quality minerals portfolio in Madagascar.
Malagasy has an existing royalty stream from labradorite quarrying operations in Madagascar as well as third-party rental income from its head office and support base in the country's capital, Antananarivo. These revenues provide valuable cash flow to assist in covering in-country overheads and a portion of local exploration costs.
The funds raised will be applied to:
a significantly expanded exploration and drilling program at the Ampanihy nickel-copper-PGE project in southern Madagascar. Recent drilling beneath a massive sulphide gossan system at the Ianapera Project, located within the Ampanihy Project, has confirmed the presence of a large-scale sulphide system of magmatic provenance. An initial diamond drilling programme is underway, and massive and disseminated sulphides have been intersected beneath these gossans, indicating the potential for a large-scale magmatic sulphide nickel-copper-PGE system;
Follow-up drilling at the Vohibory copper-zinc-gold-silver project is to commence shortly. Strong surface copper-silver anomalies (up to 28% copper and 206g/t silver at surface) have been returned from sampling of gossans, within an 8km strike length of copper-silver mineralization with associated VTEM conductors and gravity anomalies and interpreted fault structures. Initial drilling is planned in this area prior to Christmas to assess the potential for a large-scale Bisha-style VMS copper-gold and base metal deposit;
expanded assessment of the Fotadrevo vanadium project is to be undertaken in the new year, where previous trenching has defined +6.5 strike km of vanadium mineralization with an additional 35km of strike remaining to be tested; and
general working capital and corporate overheads in Australia.
Malagasy's Managing Director, Mr. Steve Goertz, said the capital raising would enable the Company to significantly expand its exploration efforts in Madagascar, with substantial drilling and exploration planned next year across its key projects in conjunction with geophysics and other state-of-the-art exploration techniques and modeling to assist in refining the search radius for prospective sulphide mineralization.
"We are very excited about the potential of both the Ampanihy and Vohibory Projects, and we expect to be in a position to refine our exploration targeting significantly as a result of the initial drilling undertaken this year," Mr. Goertz said.
"While the initial hole at the Ianapera Project at Ampanihy did not deliver economic mineralisation, the initial drilling has provided us with important geological information and will act as a pathfinder to substantial accumulations of nickel-copper-PGE mineralization," he continued.
"As with any greenfields exploration project, it's still early days and there's lots of work to do, but we are very encouraged by what we have seen so far and we believe the discovery potential of this project is significant," Mr. Goertz added.
This release relates to the request for the Trading Halt dated 19 November 2010.
