Como-based mineral exploration company GME Resources Ltd will raise up to $11 million through a non underwritten issue, the company has announced.
Como-based mineral exploration company GME Resources Ltd will raise up to $11 million through a non underwritten issue, the company has announced.
The funding will advance the Bankable Feasibility Study and expedite a trial mining and demonstration heap leach program at the Company's 100 per cent owned NiWest Nickel Laterite Heap Leach Project located in the North Eastern Goldfields of Western Australia.
Announcement pasted below:
The Company is pleased to announce a one for ten renounceable rights issue at 50 cents. The issue which is not underwritten will raise a maximum of $11,018,300 if all rights are taken up. The appendix 3B along with the notice letter to shareholders and the disclosure document are attached.
In making this issue renounceable, the board has elected to continue with its practice to offer the shareholders the opportunity to benefit further in the underlying growth of the Company's assets.
Funds from the rights issue will be used to advance the Bankable Feasibility Study (BFS) and expedite a trial mining and demonstration heap leach program at the Company's 100% owned NiWest Nickel Laterite Heap Leach Project located in the North Eastern Goldfields of Western Australia.
The Company is in discussions with a third party to agree a frame work for the Company to conduct a trial nickel laterite heap leach operation at an operating mine of that third party. There are cost and time benefits in conducting the trial at an operating mine. The frame work will need to include (amongst other things) access to the site and facilities thereon and on what basis the Company will pay for the same. If a frame work can be agreed further announcements will be released to the market.
A Pre Feasibility Study (PFS) completed in May 2007 by internationally recognised engineering firm Aker Kvaerner outlined capital costs to develop the project of $455 million which included an integrated acid plant and metal recovery facility for a mixed sulphide product. (Refer ASX announcement dated 14 May 2007)
The PFS illustrates that the project is capable of delivering long term economic benefits to shareholders. Based on Nickel prices of US$10/lb and expected operating costs of US$2.50/lb the financial model shows the project has the potential to generate an operating surplus of $3.7 billion over its 20 year mine life. Production from the 1.5 million tonne per annum Heap Leach operation is expected to be over 13,000 tonnes of Nickel and 600 tonnes of Cobalt annually.
The initiatives taken by the Board over the past two years in relation to the ongoing drilling programs, metallurgical test work and development studies have resulted in a significant revaluing of the Company.
It is anticipated that the Company will continue to be re rated as further milestones are achieved through the delivery of the BFS. Accordingly, the directors intend taking up their full entitlements and urge all shareholders to do likewise
