MARENGO Mining has continued to tick the boxes at its "world-class" Yandera copper-molybdenum project in Papua New Guinea, announcing a $12.5 million raising, which will see the junior through to completion of a pre-feasibility study and continue to grow the resource inventory.
Marengo Mining managing director Les Emery, PNG Minister for Mining Sam Akoitai and local MP Peter Yama at the Yandera project
Marengo will place 50 million shares at 25c each over two tranches. The first tranche will be issued immediately under Marengo's existing 15% placement capacity as deemed by Australian Stock Exchange limits, with the second tranche to follow approval from a shareholder meeting to be called shortly.
The funds will finance pre-feasibility work already underway, including preliminary mine design and openpit optimisation, metallurgical test work, plant flowsheet design, and throughput options with capital and operating costs estimates.
The study is due to be complete by mid-next year.
Marengo will also devote capital to ongoing drilling of the Gremi, Omora and Imbruminda zones to firstly target shallow, high-grade zones suitable for early-stage mining and cash flow, and secondly to examine their potential to add "significant tonnages" to the resource at greater depths. The company will also be drilling selected mineralised zones along the Yandera porphyry sequence.
Marengo managing director Les Emery told PNGIndustryNews.net he expected to at least double the resource and improve the grade when the next resource estimate was released toward the end of the first quarter next year.
"We've got a substantial resource identified together with a much larger mineralised envelope and we'll continue to build on that," he said.
"I think people will be surprised as this resource number continues to grow."
Environmental and social aspects of project development will also absorb part of the funding, as will general corporate activity and working capital.
The raising follows the release at the start of this month of an initial 371 million tonne resource averaging 0.49% copper equivalent for 4.01 billion pounds of contained copper metal, which has an in situ value of $US14 billion ($A18.5 billion.
International private equity resource fund Sentient Global Resources Fund II has agreed to subscribe for $6.3 million worth of shares, which will make it the largest shareholder at 19.7%.
Emery said the participation of Sentient and other institutional and professional investors reflected the confidence he has in the project and PNG.
"The amount of money they're putting in speaks for itself – they have no issues with PNG at all and see it as a good place to work in, exactly the same as we do," he said.
"You've got an international resource investment fund that searches worldwide for opportunities putting its hand in its pocket for $6.3 million – that's a serious vote of confidence.
"I knew we were on to something world-class the day we went into the project back in early 2005. I've always been completely confident in this project and continue to be.
"What pleases me is that as the various institutions come on board it proves to that people are starting to understand what I've been telling them for the last 18 months."
MGO Price at posting:
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