Diversified resource group Batavia Mining Ltd announced a placement and a proposed early exercise of June 2006 options amounting to an $8.9 million capital raising (prior to costs) to underpin an accelerated exploration, feasibility and pre-development pr
Diversified resource group Batavia Mining Ltd will raise $8.9 million (prior to costs) to underpin an accelerated exploration, feasibility and pre-development program during 2006 at its Deflector Gold-Copper Project at Gullewa in Western Australia.
In addition, part of the funds raised will be used to commence exploration activities within Batavia's Northern Territory uranium portfolio following the announcement today that the Exploration Licences have been granted for the Harts Range Uranium Project, clearing the way for ground reconnaissance exploration to commence in the near future.
Below is the edited announcement:
$8.9 Million Capital Raising
Batavia said today (Wednesday) it had signed an agreement with Australian broking firm, Patersons Securities Ltd, to manage a $1 million share placement and underwrite the early exercise of its 15 June 2006 Options (ASX: BTVOA). At the entitlement date (11 April 2006) option holders will be offered one new option exercisable at 5 cents on or before 15 June 2007 ("2007 Options") for each 2006 option held, the acceptance of which is subject to the 2006 options being exercised on or before 28 April 2006.
Batavia currently has 157,830,023 15 June 2006 options on issue, exercisable at 5 cents. The early exercise of these options would raise up to $7.9 million.
Patersons will underwrite the amount that the Company would receive if all holders of 2006 Options currently on issue had accepted the 2007 Option Issue prior to 28 April 2006. The Directors and major shareholders have each agreed to sub-underwrite the early exercise of the 15 June 2006 options. The Underwriting Agreement has the usual terms and conditions.
The share placement comprises 20 million shares to be placed with the Phoenix Gold Fund at an issue price of 5 cents with one free attaching 5 cent existing listed option (2006 Options).
Batavia will shortly dispatch a notice of meeting to shareholders seeking approval to ratify the placement and authorize the 2007 Option Issue and the Patersons issue. The notice of meeting will contain a detailed timetable relating to the 2007 Option Issue and will set out the terms of the Underwriting Agreement.
Batavia will make an application to the ASX to list the 2007 Options.
Use Of Funds
The proposed capital raising represents a major step forward for Batavia's exploration and pre-development activities, with a large portion of the funds raised to be allocated towards intensive resource extension drilling, in-fill drilling, and delivery of a Bankable Feasibility Study on the Deflector Gold-Copper Project with a view to advancing the Project towards production as rapidly as possible.
Following successful deep drilling programs last year, Batavia earlier this year announced a 130% increase in the resource for the principal Deflector Deposit at Gullewa to 2.65 million tonnes at 6.04 g/t gold and 1.23% copper containing 775,000 gold equivalent ounces.
The Company is close to completing a Pre-feasibility Study on the development of the Project after successfully developing a flotation flowsheet for all three types of mineralisation within the Deflector Deposit, representing one of the final objectives required to progress development of the project.
The Pre-feasibility Study is expected to be finalised in the March 2006 Quarter.
The funds raised will be used to complete the Pre-feasibility Study and then expedite a Bankable Feasibility Study. In addition, funds will be applied towards an aggressive new program of deep drilling designed to test for extensions of the Deflector West and Central lodes at depth, and also to complete in-fill drilling to bring a significant portion of the inferred category of the mineral resource into the indicated category.
The recently completed drill program successfully tested the resource to 300m vertical depth; however both the Central and West lodes remain open. Batavia is targeting a gold equivalent resource of approximately 1 million ounces from this drilling campaign.
The Company also has an IP (induced polarization) survey currently in progress covering the Deflector deposit and areas immediately along strike to identify further drill targets for a similar style of mineralisation.
Batavia's Managing Director, Mr Greg Durack, said the Company was delighted to have received the support of a leading Australian broking firm to implement a landmark capital raising which would enable it to progress its key assets, particularly the Deflector Gold-Copper Project, to the next level.
"The Gullewa Project, with its existing plant and camp infrastructure and relatively low capital cost estimate of $13.8 million for the proposed process plant and infrastructure upgrade, represents an attractive opportunity for Batavia to advance rapidly towards production to take advantage of current strong metal prices," Mr Durack said.
"This raising will provide funding to accelerate our pre-development and feasibility activities at Gullewa, while at the same time building on last year's successful exploration programs by launching an intensive deep drilling program aiming to increase the resource to over 1 million gold equivalent ounces," he added.
"This capital raising represents a key milestone for the Company in our objective to establish a diversified resources group with a strong production base in the gold-copper business," Mr Durack commented. "The funds raised will also enable us to progress exploration of our new uranium portfolio in the Northern Territory, where we have assembled some quality exploration targets with considerable potential."
Harts Range Exploration Licences Granted
Batavia advised today that the Exploration Licences for its Harts Range uranium prospect in the Northern Territory had been formally granted, clearing the way for ground exploration activities to commence.
The Company has identified a number of advanced targets for high-grade, pegmatite and structurally controlled uranium deposits at its Harts Range and Arunta Prospects in the Northern Territory. The outstanding Exploration Licence Applications (ELAs) for Batavia's other NT uranium prospects are expected to be granted within the next four months.
