Cougar Metals plans $2m raising

Subiaco-based Cougar Metals NL plans to raise $2 million to fund the development of its Brazilian mineral drilling business and continue work on its Pyke Hill nickel project in Western Australia and Alta Floresta gold project in Brazil.

The Company proposes to undertake a capital raising of up to $2 million via the issue of up to 16 million convertible notes at a face value of 12.5 cents each. The funds raised by the capital raising will be used primarily to fund the acquisition of two new drill rigs and support equipment for GeoLogica Sondagens, Cougar's mineral drilling business in Brazil.

In addition, the capital raising will fund further metallurgical testwork to assess the potential of the Pyke Hill Nickel Project to support an economic heap leach operation and on-going soil sampling and drilling programs at the Alta Floresta Gold Project in Brazil.

In anticipation of completing the capital raising, the Company has already secured advanced funds of $1.25 million via a loan arrangement. The loan funding has enabled the Company to expedite the acquisition of the new drill rigs and thereby deliver earlier cashflow from their operation in Brazil.

It is anticipated that the loan will be repaid via the issue of 10 million of the 16 million convertible notes proposed to be issued.