25/02/2008 - 11:17

Mallee Gold forms new alliance ahead of ASX debut

25/02/2008 - 11:17

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Perth-based Mallee Gold Corporation Ltd has formed an alliance with Metals Finance Corporation to develop mineral resources projects in the United States.

Mallee Gold forms new alliance ahead of ASX debut

Perth-based Mallee Gold Corporation Ltd has formed an alliance with Metals Finance Corporation to develop mineral resources projects in the United States.

Under the deal, Mallee Gold will provide exploration and development services for Brisbane-based Metals Finance's small to medium scale metal recovery project aspirations in North America and will be entitled to a 50 per cent revenue interest post expenses from developed projects.

The decision to sign the alliance has precipitated the lodgement by Mallee Gold of a supplementary prospectus for its current offering in the marketplace of a $5 million initial public offer.

As a result, the closing date for its offer has been pushed back to March 31, with Mallee Gold now planning to list on the Australian Securities Exchange in early April.

"The alliance, which we intend to transition into a formal joint venture, provides significant upside exposure in a market with high prospectivity for new metals projects within the target project size," Mallee Gold executive chairman Keith Hood said.

"As importantly, the North American market has a sharp and experienced appreciation for the equity balance and price offtake opportunities for local greenfields mineral commodity developments."

Mr Hood said MFC had a highly successful track record with small to medium size metals projects in Australia, Canada, Chile and South Africa.

"Any work program forays by Mallee Gold into North America's resources sector will also be a natural complement for our strategies to grow a new gold business in southern Western Australia."

The Australian assets vended into the Mallee Gold IPO are nine exploration projects covering gold, nickel, copper and uranium prospects in areas of rich mineralisation between Kalgoorlie and the southern port of Esperance.

Mallee Gold is offering up to 25 million shares at 20 cents each to raise up to $5 million with one free attaching option for every two shares issued with an exercise price of 20 cents and an expiry date of November 30, 2012.

The minimum subscription is $2 million.

The offer includes an entitlements issue of options within six months from the company's ASX listing, on a two-for-five basis, exercisable on or before November 30, 2014 at 25 cents per option.

Assuming full subscription under the offer, Mallee Gold will be capitalised on listing at approximately $9.5 million.

The company's 1,185 square kilometres of exploration holdings and applications host primarily gold-based brownfields and greenfields projects along with nickel, uranium and copper prospectivity.

Most tenements between Norseman and Esperance are wholly-owned and cover the Duchess, Lady Mary South, Oscar Range, Jimberlana South, Brumby Flats, Lake Gilmore, West Grass Patch and Mount Ridley projects.

The ninth project involves an agreement to farm into 70 per cent of the Water Tank Project currently held by Royal Resources Ltd.

Mallee Gold plans to spend more than $1.2 million on exploration in its first 12 months as little previous work had been conducted over the tenements.

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