funding

It is interesting to think about RXM options for funding.

1. Self fund entire capital needs through junk bond market (expensive finance at 10+%) but upside if copper, iron and gold look bullish LT then we hold 100% interest in hillside.

2. Self fund say 75% through junk bonds to get project underway then do a CR to raise $250M to complete project once SP jumps on the funding news. Any CR at current share price would be lunacy and dilute current holding significantly - might be a good option if SP was $2+.

3. JV partnership with a major or cashed up mid-tier miner where RXM brings the resource at BFS stage plus EIS plus small capital raise ($100M) and partner brings remainder of required cash and mining, logistics expertise.

4. 100% takeover by cashed up behemouth with enough cash to pay premium for complete takeover plus another $1B cash for all required project capital works. (Unlikely IMO)

I think the best option would be a JV or takeover sale but JV more likely. I would like JV partner to be OZL because I am a holder of both and also think that location, size and project timing is ideal for both. Overburden removal completion at Prominent Hill pit expansion dovetails in nicely with mining startup at hillside, some trucks and equipment can be relocated.

If nobody is willing to pay a premium in a takeover or share the profits & risks in a JV then as long as copper, iron and gold are bullish RXM should be talking to bod market players.

Financial times link below discusses bond market for junior miner project funding. Linc Energy (also held) funded its US oil exploration and production projects with these junk bonds recently at 12.5% annual interest - since then their SP went from 55c to $2 before the shale Ann.

http://www.ft.com/intl/cms/s/0/c340bca6-a67d-11e1-968b-00144feabdc0.html#axzz2JWEdmwKj

For discussion....