PERTH (miningweekly.com) – ASX-listed New Energy Minerals has announced a series of investments that will assist with the development of its Caula vanadium/graphite project, in Mozambique.
The company on Wednesday said that it had entered into a binding agreement with a Hong-Kong based investor group, the first of which is a share placement worth A$1.5-million.
Some 23-million shares will be placed at a price of 6.5c each, giving the investors a 15.4% shareholding in New Energy.
The share placement will be conducted in two tranches, with the first tranche of 17.4-million taking place under the company’s existing placement capacity, and the second tranche of some 5.67-million shares, being subject to shareholder approval.
The investors will be issued one free attaching unlisted option for every share issued, and each option will have an exercise price of 14c, and an expiry date of 36 months from the date of issue. The issue of the options was also subject to shareholder approval.
Following the share placement, the investors will be entitled to nominate two directors to the New Energy board.
In addition to the share placement, the investors will also invest A$3.5-million at asset level, through a subscription of 50% of the shares of New Energy subsidiary Balama Resources, which currently holds an 80% interest in the Caula project.
The asset-level investment is subject to a legal and technical due diligence, as well as regulatory approvals.
New Energy said on Wednesday that proceeds from the placement and the strategic investment will be used for assays, metallurgical testing, prefeasibility studies and preparation work for the Caula Phase 1 production, as well as for general working capital.
A recent scoping study at Caula estimated that the two-phased development would cost some A$167.6-million to develop.
Phase 1 of the project would require a capital investment of some A$10.6-million to develop a project capable of producing between 10 000 t/y and 15 000 t/y of graphite concentrate, and between 14 000 t/y and 18 000 t/y of vanadium concentrate.
The Phase 2 development would require a further capital investment of A$157.6-million, and would increase graphite production to 120 000 t/y and vanadium concentrate production to 204 200 t/y.