Elementos (ASX: ELT) has launched a $2.3 million (before costs) pro-rata non-renounceable rights issue which is already receiving strong support from existing shareholders and experienced resource investors.
The rights issue is priced at $0.035 which is a 31.7% discount to the 5-day volume weighted average price, plus one free option with an exercise at $0.06 for every two new shares acquired.
The pro-rata basis is 4 new ordinary shares for every 5 ordinary shares held in the company on the record date.
Patersons Securities has been appointed as the Lead Manager and Underwriter - and will be underwriting the balance of the offer after pre-commitments from existing shareholders - which already totals around $1.5 million.
The new funds will advance geophysics and drilling at the company's Tamaya copper project in Chile, where the company recently intersected further high grade copper mineralisation of up to 3.74% from vein samples and 2.49% over four metres from channel sampling.
Existing shareholders show strong support
Andes Investors LLC, an investment company associated with James D. Calaway, a non-executive director of Elementos, is acquiring its entitlements and sub-underwriting a further $0.77 million of the offer.
Additional support from shareholders includes Neil Stuart, a previous director of the company, Belmont Park Investments Pty Ltd and Panorama Ridge Pty Ltd - who have committed to take up their full entitlements.
Tamaya delivers promising results
Just last week Elementos received the results from 57 new samples which also showed larger zones of lower grade copper mineralisation, including 22 metres at 0.54%, had been intersected.
These results continue to show the potential for large volumes of moderate to low grade mineralisation, supplemented by high grade mineralisation within the structures.
Campanil highlights included; 17.5 metres at 0.41% copper, including 4.8 metres at 0.8% copper; 3.9 metres at 2.16% copper; and 2.9 metres at 1.02% copper.
Acros at Almagro, best results were; 4.1 metres at 2.49% copper and 6 metres at 0.72% copper, while San Jose returned 10 metres at 0.71% copper, including 6 metres at 1.15% copper.
Meanwhile, Dichosa unearthed 1 metre at 3.74% copper and 0.39 grams per tonne (g/t) gold and 0.8 metres at 1.67% copper and 0.49g/t gold from vein samples; and 22 metres at 0.54% copper, including 8 metres at 1.39% copper from a channel sample.
These structures and the potential porphyry target will be drill tested later in 2012.
Similarities to Teck's Carmen de Andocollo
Tamaya is situated within the Early Cretaceous Metallogenic Belt of central and northern Chile, close to the eastern margin of the Atacama Fault Zone.
Previous mapping has identified evidence of potential porphyry related mineralisation similar to that at Teck Resources' (NYSE: TCK) 476 million tonne Carmen de Andocollo mine, 40 kilometres to the north, and at Southern Hemisphere Mining's (ASX: SUH) 106 million tonne Llahuin deposit, 85 kilometres to the south.
The metallogenic belt is host to a number of significant IOCG and porphyry deposits including; Tres Valles (Vale), El Espino(Pucobre) and Punitaqui (Glencore).
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