GOLD explorer Chester Mining is diversifying into agribusiness by investing in two horticulture projects established by Rewards Group in the Ord River region.
Rewards Group, a specialist manager of tax effective investment schemes, has invested more than $20 million establishing about 375 hectares of mango and red flesh grapefruit orchards near Kununurra.
Chester intends to spend $1.2 million acquiring a ‘beneficial interest’ in 90ha of this land.
Chester chairman John Kenny said the investment was the first deal in a strategic alliance between the two groups, adding that Chester would look at further investments in Rewards’ teak, sandalwood and tropical fruits projects.
He said the alliance had been structured so that ‘ethical’ investment funds would be able to invest in Rewards agricultural projects via Chester’s tradeable shares.
Chester will fund its agribusiness investment from the proceeds of a rights issue, which seeks to raise $2.3 million at a price of 1 cent per share.
Rewards Group, which made a $9.5 million pre-tax profit last year, will fully underwrite the rights issue.
As well as investing in the agribusiness projects, Chester will use the proceeds of the rights issue to fund ongoing exploration and development work at its mineral projects.