South Perth-based gold explorer NGM Resources Ltd will raise $1.6 million through a placement and move into the burgeoning uranium market though an acquisition, the company announced today.
South Perth-based gold explorer NGM Resources Ltd will raise $1.6 million through a placement and move into the burgeoning uranium market though an acquisition, the company announced today.
NGM has signed an agreement with private prospector Terry Byrt and partners to explore and ultimately acquire a 100 per cent interest in the Marsh's Creek uranium project 150km west of Townsville.
The company will pay $150,000 for a six month option period in which the company will evaluate existing data and conduct primary field investigations.
Under the agreement, should the two groups enter into a joint venture, NGM will conduct an exploration program including modern geophysical surveys and drilling, earning a 51 per cent interest in the project should it proceed after 12 months.
On completion of a bankable feasibility study NGM will have earned 70 per cent in the project.
On a decision to mine, NGM will pay Byrt $4 million in cash, $1 million in shares and grant a 2.5 per cent net royalty on production. At this point NGM will have earned 100 per cent interest in the project.
The placement of 8 million shares at 20c each was made with Hartleys' Ltd, to fundraise for further exploration and development activities, as well as additional working capital.
NGM shares surged 22.7 per cent on the news, closing at 27c.
The full text of a company announcement is pasted below
NGM Resources Ltd is pleased to announce the company has signed an Agreement with private prospector, Terry Byrt and partners, to explore and ultimately earn a 100 per cent interest in the Marsh's Creek uranium project 150km west of Townsville, in Queensland.
Discovered in the 1970's, the Marsh's Creek uranium project was previously explored by the Utah Development Company between 1977 and 1980.
Utah identified outcropping uranium mineralisation over a strike length of approximately 14km. The best assays came from Anomaly Nine in the South Prospect which included a grab sample returning high grade 0.325% U3O8 within a 0.6m wide zone averaging 0.04% U3O8. The best hole in shallow drilling intersected 0.5m grading 0.03% U3O8. These grades are indicative of the presence of mineralisation, however there has been insufficient exploration to define a Mineral Resource and it is not certain that further exploration will result in the determination of a Mineral Resource.
For the purposes of comparison, grades of mined uranium deposits range from 0.02% U3O8 for in-situ leach deposits in Kazakhstan to 0.31% U3O8 at Ranger 3 in the Northern Territory
NGM Resources Managing Director Dr Russell Penney said the agreement paved the way for preliminary fieldwork to commence immediately.
"Following a successful review of existing data and preliminary fieldwork, NGM will undertake an exploration campaign using modern techniques on an under-explored asset. The previous drilling conducted by Utah was very shallow, with the deepest hole drilled to less than 30m." Located on a granted exploration licence (EPM 15128), the near-surface uranium mineralisation discovered by Utah is open down dip and along strike.
Details of the exploration campaign are expected to be outlined to shareholders in the 2007 March Quarter.
The Marsh's Creek Agreement
Detailed terms include:
- NGM has a six month option period in which to evaluate the existing data and conduct preliminary field investigations. For this NGM will pay Byrt A$150,000.
- On exercising its option to enter into a joint venture agreement, NGM will conduct an exploration program including modern geophysical surveys and drilling. If NGM elects to proceed with the joint venture after 12 months it will have earned a 51% interest in the project.
- On completion of a bankable feasibility study NGM will have earned 70% in the project.
- On decision to mine, NGM will pay to Byrt, $4.0 million in cash, issue shares in NGM to the value of $1.0 million and grant a 2.5% net royalty on production. At this point NGM will have earned 100% interest in the project.
Uranium in North Queensland
The geological settings of northern Queensland are known to host a number of uranium prospects including Mega Uranium Ltd's (TSX:MGA) Ben Lomond uranium deposit, which lies 100km south east of Marsh's Creek, where Mega has quoted a resource containing 10.7 million pounds of U3O8 at a grade between 0.21% and 0.27% U3O8. Glengarry Resources' (ASX:GGY) Oasis uranium prospect,150km west of Marsh's Creek, has similar geological settings to the Ben Lomond deposit and has reported intersections up to 10m @ 0.12% U3O8.
Private Placement with Hartleys' limited
The Company has agreed to place up to eight (8) million shares to institutional and sophisticated investor clients of Hartleys' Limited at twenty cents (AUD0.20) per share to raise up to AUD$1.6m.
The placement has been made to institutions and sophisticated investors located in New York, Europe and Australia. Upon issue, the shares will rank pari passu with the existing ordinary shares on issue.
Funds raised from the placement will be used to further the Company's exploration and development activities and for additional working capital.
It is proposed that settlement of the issue will occur on or before 23 January 2007. An Appendix 3B will be lodged shortly.
Notice under Section 708A
The Company gives notice pursuant to Section 708A(5) of the Corporations Act 2001.
The shares will be issued without disclosure to investors under Part 6D.2, in reliance on Section 708A(5) of the Corporations Act.
The Company, as at the date of this notice, has complied with:
1. the provisions of Chapter 2M of the Corporations Act; and
2. Section 674 of the Corporations Act.
There is no excluded information for the purposes of Sections 708A(7) and (8) of the Corporations Act.
About NGM
NGM is an ASX-listed company head quartered in Perth, Western Australia. The company currently owns more than 3,000 km2 of tenements within the North Telfer region and more than 20,000 ounces of gold in the Edgerton area.
The NGM Board has reviewed numerous properties before selecting the Marsh's Creek Project. NGM continues to assess mineral opportunities with potential Joint Venture partners in Australia and overseas.
