Ram Resources (ASX: RMR) will be the newest player to enter the highly prospective Albany-Fraser Orogen of Western Australia with plans to acquire a 271 square kilometre tenement package located near to recent nickel-copper discoveries. The company will re-list today and the share price is expected to rise on the news.
The Albany-Fraser Orogen is one of the hottest postcodes at the moment with tenants such as Sirius Resources (ASX: SIR) experiencing increased investor interest on new discoveries.
Ram’s new landholding is located just 20 kilometres west of Sirius’ Nova nickel-copper massive sulphides discovery, and in the same region as AngloGold Ashanti (ASX: AGG) and Independence Group's (ASX: IGO) plus-5 million ounce Tropicana gold deposit.
The tenements, known as the Fraser Range Project, also lie adjacent to projects held by Enterprise Metals (ASX: ENT) which recently announced anomalous soil results indicating significant base metal exploration potential.
The acquisition presents the added advantage of allowing Ram to operate all year round.
During the Northern Hemisphere winter months, when the company’s Motzfeldt Project in Greenland is inaccessible due to weather conditions, Ram will be able to undertake exploration programs on its Australian projects.
The Fraser Range Project is highly prospective for gold, with calcrete geochemistry coincident with a weak magnetic unit in regional magnetics, which runs through the middle of the licences.
The project also has potential for base metals with a prospective magnetic unit, which runs through Sirius’ and Enterprise Metals’ tenements, and along the southeast side of the Regency tenements.
Geochemical and geophysical databases covering the Fraser Range Project contain a number of gold in calcrete anomalies up to 13 parts per billion, which have not been drill tested.
Consideration
Ram has entered into a binding agreement to acquire the three granted exploration licences from Regency Mines Australia.
To acquire an initial 80% interest Ram will issue a total of 1.2 billion shares at $0.015 each in three tranches for a total consideration of A$18.15 million.
Ram can then move to acquire the remaining 20% by making a cash payment of $440,000 on or before 30 November 2013.
Up until the 30 November 2013, Regency’s 20% interest is to be free-carried.
Exploration plan
Ram has outlined an initial budget of $250,000 for the next phase of exploration over the project which will look at following the discovery methods used for “Tropicana” style gold and “Nova” style base metals.
Ram plans to complete further geochemistry to identify anomalies for drill testing.
The company will then consider an air core drill program to investigate anomalous gold over 10 kilometres of strike, an open file AEM conductor and a magnetic unit of similar size to the recent Nova discovery.
Capital Raising
Ram will undertake a capital raising of a minimum of $1.5 million, after costs, to fund exploration programs across its existing projects and the Fraser Range Project.
RMR Price at posting:
12.0¢ Sentiment: Buy Disclosure: Held
