Subiaco-based manganese explorer Spitfire Resources Ltd will today open its initial public offer, aiming to raise $4 million for exploration and working capital.
Subiaco-based manganese explorer Spitfire Resources Ltd will today open its initial public offer, aiming to raise $4 million for exploration and working capital.
The company, which will issue 20 million shares at 20 cents each to raise the money, has acquired an 80 per cent stake in the South Woodie Woodie Manganese project in the East Pilbara from Churchill Mining Plc - a UK based company listed on the London Stock Exchange's Alternative Investment Market.
The site was formerly managed by Churchill subsidiary Planet Mining Pty Ltd.
Aside from its scheduled drilling start when the 2008 field season opens, Spitfire has also signed a deal giving it priority rights to examine the projects of Indonesian company PT Ridlatama Nickelindo.
The company, which will also accept $2 million in oversubscriptions through the issue of 10 million shares at 20 cents each, aims to undergo a transition from explorer to miner as soon as possible.
The offer is not underwritten.
Spitfire is chaired by Churchill managing director Paul Mazak, with former Churchill joint managing director and Mining News.net founder James Hamilton serving as managing director. They are joined on the board by former Niagara Mining chief executive Christopher Daws and Churchilll company secretary Russell Hardwick as non-executive directors.
Spitfire has retained Rix Levy Fowler as auditor and investigating accountant, with Westwind Capital to serve as corporate adviser. Steinepreis Paganin will serve as independent solicitor.
The offer is due to close on November 30.
The full text of a company announcement is pasted below
- $4M IPO comprising 20M shares at 20 cents with provision for $2M in oversubscriptions
- Aggressive drilling program planned at 80%-owned South Woodie Woodie Manganese Project in the prolific East Pilbara manganese province.
- +$1.1M already spent on exploration and acquisition by the vendor using state-of-the-art exploration techniques including VTEM and IP
- Eight priority manganese targets ready to drill with heritage clearances in place.
An advanced manganese exploration initiative in Western Australia's world-class East Pilbara manganese province underpins the A$4 million Initial Public Offer (IPO) of newly-established Australian mining company, Spitfire Resources Limited ("Spitfire"), which opens today (Tuesday , 30 October 2007).
Spitfire's core asset is an 80% interest in the South Woodie Woodie Manganese Project - acquired from successful AIM-listed mining company, Churchill Mining PLC - where Spitfire has scheduled an aggressive drilling program to commence at eight priority manganese resource targets at the start of the 2008 field season.
The Perth-based Company lodged a Prospectus with the Australian Securities and Investments Commission (ASIC) on 22 October for the offer of up to 20 million shares at 20c each, to raise up to A$4 million with provision to accept oversubscriptions of up to a further 10 million shares at 20 cents to raise a further $2 million. The Offer opens today (Tuesday, 30 October) and is scheduled to close on 30 November, with the Company aiming to list on the Australian Securities Exchange around 14 December.
At completion of the IPO (assuming a minimum subscription of $4 million), Spitfire will have 51 million shares on issue with Churchill Mining holding 25 million shares or 49% as vendor consideration. Spitfire has an option to acquire the remaining 20% interest in the South Woodie Woodie Project for consideration of A$3 million and completion of A$1.5 million of exploration within 18 months of listing.
Churchill Mining decided to divest 80% of the Project to Spitfire in order to focus its resources on its Indonesian coal and coal bed methane projects. Churchill's Executive Director, Mr James Hamilton, has taken up the position of Managing Director of Spitfire to spearhead its growth strategy.
The South Woodie Woodie Project comprises three granted Exploration Licences covering an area of approximately 490km2. The principal area of initial exploration focus lies some 40km down-strike from the 1Mtpa Woodie Woodie manganese mine, operated by Consolidated Minerals Limited.
Exploration success at South Woodie Woodie through the delineation of strategic manganese resources would position Spitfire to capitalize on strong levels of investor and market interest in the manganese sector, which has experienced a dramatic turnaround in the past six months following a significant tightening in the international market and withdrawal from the market of some key suppliers.
Manganese prices have strengthened considerably in recent times, with some suppliers reporting prices in excess of US$7.00 dmtu (dry metric tonne unit) on a landed (CIF) basis. According to recent media reports, one supplier confirmed manganese contracts negotiated for delivery in the December Quarter were between US7.65 and US9.10 dmtu[1], representing substantial increases from average prices of less than US$3.00 dmtu for the financial year ending 30 June 2007.
Underlying demand for manganese remains strong, with the market forecast to continue to grow at an average of 7%per annum, underpinned by strong Chinese demand. Manganese prices generally track iron ore prices with the mineral being a non-substitutable input in the steel-making process, where it is used to strengthen and harden steel.
While manganese is abundant worldwide, high-grade (+48% Mn), low-phosphorus manganese ore of the style which is typically found in the East Pilbara region is not, and is regarded as a strategic mineral globally.
Spitfire's Managing Director, James Hamilton, said that while manganese was first discovered in the East Pilbara in the 1960s, most exploration within the province had been focused within the immediate Woodie Woodie Mine Corridor, mostly because of the corporate difficulties confronting the mine's previous owners.
"For example, before the vendor, the only work carried out at South Woodie Woodie was by ANZECO in the late 1970s, which resulted in the discovery of surface mineralization at Enacheddong Creek," Mr Hamilton said. "Despite the relative paucity of exploration, work over the past decade has provided strong evidence that the East Pilbara region is in fact an extensive manganese mineralized belt.
"The other key advance has been the success of modern exploration technologies which have been deployed since the 1990s to explore for manganese orebodies in this field, including the use of new geophysical techniques such as helicopter-borne electromagnetics, high-resolution gravity and dipole-dipole induced polarisation (IP) surveys," he added.
"Because the host rock that hosts manganese mineralization in the region, the Carrawine dolomite, generally lies under transported cover, new exploration methodologies - particularly geophysics - have really come into their own," Mr Hamilton said.
Spitfire is pursuing exploration based on a new conceptual model for manganese mineralisation with extensive use of these geophysical techniques to search for "blind" deposits, that is, those that are hidden below younger rocks and regolith and are not exposed at surface. In particular IP and gravity ground surveys and airborne electromagnetic surveys have had direct exploration success although many deposits were found by a combination of techniques.
Work carried out by Churchill Mining on the tenements includes extensive aerial photography, satellite data, field mapping, soil sampling and surface rock chipping, as well as 6,600 line km of sophisticated airborne geophysics utilising the state-of-the-art Versatile Time Domain Electromagnetics (VTEM) heli-borne magnetics system. The Company also completed an extensive IP survey.
Providing an added dimension to its longer term growth strategy, Spitfire has also developed a relationship with PT Ridlatama Nickelindo (RNI), a private Jakarta-based company (whose owners have experience in helping listed and non-listed groups secure resource projects in Indonesia). Using its local knowledge and contacts, the principals of PT Ridlatama Nickelindo assist both Western and Asian investors build prospective ground positions for a variety of commodities in Indonesia.
An Experienced Team
Spitfire is led by a highly experienced management team with significant international track records in mineral exploration, project finance, corporate management and tenement administration, headed by Paul Mazak as Chairman and James Hamilton as Managing Director.
Mr Mazak is a business development specialist and managing director of Hastings and Associates Pty Ltd for the past 18 years. Responsible for leading and managing financial, investment, consulting and governmental teams across the globe, Mr Mazak has an intimate knowledge of business practice in many parts of Asia, Africa and Europe. Mr Mazak specialises in securing projects for listed companies. He has been Joint Managing Director of Churchill Mining Plc since 2005.
James Hamilton is a former award-winning financial journalist who has specialised in covering the global resources industry. For 13 years Mr Hamilton travelled extensively analysing exploration projects, mines and management teams across a variety of mineral commodities, including precious metals, base metals, diamonds, energy minerals and industrial minerals. He is the former Editor of Australian technical mining journal Australia's Mining Monthly. He has also been editor of dedicated mining investment magazine ResourceStocks and is the founder of mining information news service, MiningNews.net.
The rest of the Board includes non-executive directors Chris Daws and Russell Hardwick. For the past four years, Mr Daws has held the role of CEO for ASX-listed company Niagara Mining Limited (now Poseidon Nickel Limited) - a company which he helped grow from a sub-A$10 million market capitalisation to an organisation with a market value of more than A$200 million. Mr Hardwick, who is also Company Secretary, is an accountant with 15 years experience with a variety of private and public companies
