14/11/2007 - 15:55

Emmerson to raise $15m in IPO to fund exploration

14/11/2007 - 15:55


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Subiaco-based Emmerson Resources Ltd has opened its initial public offer, aiming to raise $15 million to fund exploration of its iron oxide copper-gold assets in the Northern Territory, the company has announced.

Subiaco-based Emmerson Resources Ltd has opened its initial public offer, aiming to raise $15 million to fund exploration of its iron oxide copper-gold assets in the Northern Territory, the company has announced.

The company, which will issue 75 million shares at 20 cents each to raise the money, acquired the subsidiary companies of Subiaco-based Centralian Minerals Ltd when the latter was in administration in 2006.

For its $8.5 million payment, Emmerson acquired around 2,700 sqkm of exploration licences, mineral leases and mineral claims in the Tennant Creek Mineral Field, as well as the Warrego Carbon-in-Pulp gold plant, the only processing facility in the field.

Emmerson's exploration portfolio represents approximately 80 per cent of the granted mineral titles within the Tennant Creek Mineral Field.

The company is chaired by former Lafayette Mining Ltd managing director Andrew McIlwain, while Rob Bills will serve as chief executive and managing director. Joining them on the board are Timothy Hronsky, Timothy Kestell and Simon Andrew. Shane Volk serves as company secretary.

Bell Potter Securities Ltd will act as corporate adviser and lead manager to the offer, while Ernst & Young serve as auditors and independent accountant. Legal advice is provided by Steinepreis Paganin.

The offer, which is not underwritten, will close on November 30.



The full text of a company announcement is pasted below

  • IPO comprising 75M shares at 20c each to raise A$15M plus A$5M in oversubscriptions.
  • Targeting new generation of major iron oxide copper-gold (IOCG) discoveries in the Tennant Creek Mineral Field, NT.
  • Dominant 2,700km2 land position, gold processing facility and extensive geological database.
  • Strategy based on re-evaluation of entire Tennant Creek field through application of modern geophysics and exploration methodologies.

The A$15 million public share offer of newly established gold company, Emmerson Resources Limited, opens tomorrow (Thursday, 15 November 2007) ahead of a planned major new exploration initiative targeting the next generation of gold and copper discoveries in the highly endowed Tennant Creek region of the Northern Territory.  

Emmerson - which is headed up by a group of experienced Australian mining executives including former Lafayette Mining Managing Director Andrew McIlwain as Non-Executive Chairman, and former senior BHP Billiton and WMC executive Rob Bills as Managing Director - has a dominant ground position covering 2,700km2 in the Tennant Creek Mineral Field (TCMF), one of the highest grade gold provinces in Australia.  

The Company was established in November 2005 and, in July 2006, purchased the assets of Centralian Minerals Limited (formerly Giants Reef Mining Limited). The acquisition gave it 100% ownership of the extensive TCMF tenement portfolio, the only gold treatment facility in the region (the Warrego carbon-in-pulp processing plant) and a substantial geological database covering over 50 years of exploration history plus extensive infrastructure and equipment.  

Emmerson lodged a Prospectus with the Australian Securities and Investments Commission (ASIC) on 7 November for the offer of 75 million shares at 20c each, to raise up to A$15 million with provision to accept oversubscriptions of up to a further 25 million shares at 20c to raise a further A$5 million. The Offer opens tomorrow (Thursday, 15 November) and is scheduled to close on 30 November, with the Company aiming to list on the Australian Securities Exchange around 17 December.  

Leading Australian broking firm Bell Potter Securities Limited is the Corporate Adviser and Lead Manager to the raising, while Macquarie Private Wealth is Broker to the Offer. At completion of the IPO (assuming a minimum subscription of A$15 million), Emmerson will have 178.5 million shares and 21.5 million unlisted options on issue, giving it a fully diluted market capitalization at the listing price of A$40 million.  

Emmerson's exploration strategy is based around the application of modern exploration techniques and innovative methodologies to reinvigorate exploration activity in the world-renowned TCMF, which has produced over 5.5 million ounces of gold and 470,000 tonnes of copper since its discovery in the 1930s - including high-grade gold production from deposits such as White Devil and Warrego.  

"Our approach will be based on a re-evaluation of the entire Tennant Creek field and the implementation of aggressive yet systematic exploration using the latest techniques," said Emmerson's Managing Director, Mr Rob Bills. "Our view is that the declining discovery rate in the field does not reflect metal depletion, but rather a lack of new exploration concepts and the application of modern exploration techniques.  

"The significant advances in data interpretation, such as inversion techniques over the past decade provide a unique opportunity for Emmerson to leverage off the extensive historic geological database for the Tennant Creek field to deliver a whole new generation of exploration discoveries," Mr Bills said.  

"The extensive infrastructure within our portfolio including the Warrego treatment facility - which has an estimated replacement value of A$20 million - gives us an added competitive advantage, however our strategy will not be to focus on moving into production in the short term, but rather to build a world-class resource base through both brownfields and greenfields exploration."  

"In the current strong gold price environment, we believe that this will give Emmerson strong leverage to exploration success and lay the foundations for the development in the longer term of a mid-tier mining house with a high quality asset base, encompassing gold, copper/gold and the potential for uranium," Mr Bills continued.  

Magnetic geophysics was successfully used as an exploration tool in the TCMF by Peko and Normandy in the 1960s and 1970s based on the correlation between the magnetic ironstone (predominantly composed of magnetite) which is generally associated with high-grade copper-gold mineralization in the region. The application of this technology successfully delivered a number of major discoveries.  

"However, over time the search space became progressively exhausted as the most obvious larger deposits were discovered," Mr Bills commented. "In the 1990s, Normandy was able to reactive the search space by exploiting the results of a more detailed regional aeromagnetic survey which resulted in new discoveries, however there has been very little effective exploration in the region over the past decade."  

Emmerson's main objective is the discovery of significant new iron oxide copper gold (IOCG) mineralization similar to that discovered at Olympic Dam and Prominent Hill in Australia through the application of gravity geophysics and sophisticated processing technologies.  

"With the advances in geophysics and exploration techniques over the past decade, we believe that we are well placed to unlock a new generation of significant discoveries in the Tennant Creek region by reinvigorating the exploration search space," Mr Bills said. "This will include targeting new discoveries at depth - the potential for which is highlighted by the fact that only 7% of the drill holes completed to date have penetrated below a depth of 151 metres."  

Emmerson's exploration portfolio represents approximately 80% of the granted mineral titles within the Tennant Creek Mineral Field. Aboriginal land use agreements are place covering all granted and most applied tenure, enabling the Company to move swiftly to commence field-based exploration next year.  

An Experienced Team  

Emmerson is led by a highly experienced team with a significant depth of expertise in exploration for gold-copper-uranium (IOCG) deposits similar to Olympic Dam and Prominent Hill.  

The Company's Board is chaired by Andrew McIlwain, an experienced Australian mining executive and qualified mining engineer with over 20 years experience in the mining industry. Mr McIlwain has held technical, senior management and executive roles within Mount Isa Mines Limited, Central Norseman Gold Corporation, WMC Resources and Lafayette Mining Limited. He most recently held the position of Managing Director of Lafayette Mining Limited.  

The Managing Director, Rob Bills, joined Emmerson in September 2007 following a 25-year career in exploration and mining with Western Mining Corporation (WMC), then BHPBilliton. During his career with WMC, he held numerous senior management positions including Senior Mine Geologist at Kambalda, Senior Research Geologist for Australasia, President Director of WMC Indonesia, Group Exploration Manager with WMC. Most recently at BHP Billiton, he held the position of Global Commodity Specialist. Mr Bills brings to the Company a track record of global exploration and management success including a detailed knowledge of Iron Oxide Au-Cu-U deposits and a deep understanding of the exploration business.  

The rest of board includes Perth businessman and former stockbroker, Mr Tim Kestell, experienced Singapore-based merchant banker, Mr Simon Andrew, and experienced geological engineer, Mr Tim Hronsky. Mr Shane Volk is CFO and Company Secretary.


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