Volta Mining (ASX: VTM) will acquire an iron ore project in the Pilbara with direct shipping ore that borders licences held by Fortescue Metals Group, Hancock Prospecting, BHP Billiton (Mount Whaleback), Hope Downs and Brockman Mining.
The deal significantly ups the stakes and valuation for Volta as it was sitting at a market cap. of less than $2 million with not alot of market support,
The acquisition of Plibara Commodities changes all that.
Volta will acquire 100% of the issued share capital of unlisted public company Pilbara Commodities which holds a 100% interest in 19 exploration licences in the Pilbara region.
However, it is the highly prospective DSO Newman Iron Ore Project that should get market types excited.
The Sirius Extension Prospect within the Newman Iron Ore Project is directly adjacent to Brockman's Inferred Mineral Resource of 109MT at 60.0% Fe Sirius Deposit.
Surface results taken from an approximate 4km outcropping within the Newman Iron Ore Project area exhibit up to +68% Fe.
The acquisition also includes: the West Pilbara Project (Iron Ore), The Bangemall Project (Copper, Zinc and Manganese) and the Pannawonica Project (Nickel, Copper).
Peter Smith of Pilbara Commodities will join Volta Mining's Board as Non-Executive Director.
Now Volta Mining will undertake a capital raising, but that shouldn't be a problem with the infusion of the Pilbara assets.
The raising will be fully underwritten by Perth based CPS Capital Group, to advance its current and newly acquired projects.
Major Transaction terms
- 45,000,000 fully paid ordinary shares in Volta to be issued on Settlement at a deemed issue price of $0.03 each;
- 17,750,000 options (exercise price of $0.20, expiry 10 November 2016) to be issued on Settlement;
- 1,000,000 options (exercise price $0.30, expiry 10 November 2016) to be issued on Settlement;
There are additional milestone payments payable to Pilbara Commodities shareholders including: completing a drill program on one or more of the tenements which finds iron grading higher than 55% Fe over a 50 metre
continuous intersection, as well as other payments.
Managing Director of Volta Mining, David Sumich, said "This is an exciting acquisition for Volta Mining. It presents a real opportunity to further establish the company on the iron ore stage. The highly prospective Newman Iron Ore Project is complementary to our existing portfolio of iron ore assets in Gabon and we are excited to commence the next stage of exploration at the site."
As well as the Newman Iron Ore Project, Volta Mining will acquire Pilbara Commodities' remaining portfolio of projects in the region as part of the acquisition, which includes: the West Pilbara Project (Iron Ore), The Bangemall Project (Copper, Zinc and Manganese) and the Pannawonica Project (Nickel, Copper).
Volta Mining to undertake a capital raising by way of a prospectus offer to raise a minimum of A$1.5m at A$0.03.
Volta Mining is currently in negotiations for an underwriting of up to A$1.5m. The capital raising will include provisions for oversubscriptions up to a further A$1m (maximum of $2.5m in total). The capital raising will include a priority offer to existing shareholders.
That this is a game changer for Volta Mining is axiomatic; how much will it change the valuation by is the question. On the basis of the potential of Pilbara Commodities major project and the calibre of major iron companies with nearby deposits and Pilbara DSO mineralisation - the answer is the re-rating of Volta Mining has just begun today.
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