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Australian mining firm raises funds for a rare earth project acquisition in Tanzania

Discussion in 'Habari na Hoja mchanganyiko' started by Ehud, Nov 22, 2011.

  1. Ehud

    Ehud JF-Expert Member

    Nov 22, 2011
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    Monday, 21 November 2011 20:08

    By The Citizen Reporter and Agencies
    Dar es Salaam.

    Peak Resources plans to raise A$3.2 million to fund the fully acquisition of the Ngualla Rare Earth Project in the south of the country.

    The firm will do a placement of 11.3 million shares at $0.28 per share to acquire Zari Exploration Ltd the owners of the project, according to reports by international news agencies. Share placement is the sharing of shares of a company without to some private individuals as opposed to a public offering.

    The statement said the consideration for the acquisition to Zari shareholders is through a combination of cash and shares consisting of US$6 million cash and the issuing of 24.2 million Peak shares.The issue price of A$0.28 represents a discount of about 8.2 per cent to the last closing price on 11 November 2011. GMP Securities Australia Pty Ltd acted as lead manager to the placement.

    Recent drilling results have underscored that Ngualla is one of the largest and better grade new rare earth discoveries of recent years. Ngualla is a virgin discovery, and with mineralisation from surface and extending over a large area, the project has vast potential.

    Along with the existing cash balance of $5.6 million, funds raised will be used to fund the cash component of the Ngualla acquisition, continue the drilling programme at the project, and meet general working capital requirements.

    Also, the acquisition will open up new potential opportunities for future funding and offtake arrangements with strategic partners.Alastair Hunter, Peak’s executive chairman, said; “The company believes the next six to twelve months will be a very productive and exciting period in terms of exploration results and the advancement of the project to maiden rare earth resource status."

    Currently Peak as operator and manager is earning 80 per cent equity in the Ngualla Project by carrying Zari through to the completion of a Bankable Feasibility Study.

    The acquisition is conditional upon Peak completing financial and legal due diligence of Zari to its satisfaction, becoming entitled to not less than 100 per cent of the Zari shares, and obtaining Peak shareholder approval at a meeting to be held next month. Also the deal is subject to obtaining approvals from Tanzanian authorities.

    The company has also initiated its search for a managing director with technical and mining engineering experience to oversee the continued growth of the resource base and development of the Ngualla Project.Peak is expecting further drilling results from current 22,000 metre resource drilling program shortly where previous intersections included wide intersections such as 170 metres at 4.18 per cent REO from surface.

    Australian mining firm raises funds for a rare earth project acquisition in Tanzania