Ezenet (ASX: EZE) is undertaking a capital raising to generate funds of up to A$7 million as it progresses its transition from a software and services company to a mineral resources company called Oro Verde.
The capital raising will enable the company to advance exploration at its Chuminga Copper Gold Project and Vega Gold Silver Project in Chile.
Chairman Dr Wolf Martinick said, “The proposed capital raising is designed to supplement Ezenet’s current cash and available asset resources of about $3.3 million and enable us to proceed with the exploration of our exciting copper and gold opportunities at Chuminga and Vega in Chile.
“We expect the initial drilling program of seven holes at the advanced Chuminga copper/gold project to commence within the next week with first results available by the end of November 2011.”
Chuminga has an exploration target of 50 to 60 million tonnes of between 1% and 1.1% copper, 0.3 to 0.4 grams per tonne gold and 0.5 to 1% zinc, suitable for bulk mining.
The project is on the Pacific coast of Northern Chile, 115 kilometres south of the regional port and city of Antofagasta, in a region with excellent infrastructure that supports many famous world-class copper mines, including BHP Billiton’s (ASX: BHP) Escondida Mine, the world’s largest producer of copper.
Meanwhile, an independent report has found that the Vega Gold Silver Project could consist of a high grade epithermal gold-silver mineralised body similar to the “bonanza type” ore body mined at the El Indio mining centre, 20 kilometres south of Vega.
“Our drilling program at the Vega Gold Project, located in the highly prospective El Indio Gold Belt of Chile, is targeting a high grade epithermal gold/silver body and is scheduled to commence in January 2012,” Martinick said.
Ezenet has contracted an experienced drilling company to drill eight holes at Vega in clear drill targets which are evident from geophysical data.
Ezenet will offer up to 25 million shares at $0.20 per share to raise $5 million and will accept oversubscriptions of up to a further 10 million shares at the same price to raise an additional $2 million.
A Priority Offer of up to 10 million shares will be made to Ezenet shareholders registered as of the record date of 1 November 2011 on a ‘first-come first-served’ basis.
Ezenet will then undertake a Public Offer of 15 million shares together with any shares not applied for under the Priority Offer.
The closing date for both the Priority Offer and the Public Offer is 9 December 2011.
In October Ezenet announced it will seek shareholder approval at the annual general meeting this month for a proposed a three for one share consolidation.
The company said the consolidation is necessary for it to meet the requirements of Chapters 1 and 2 of the ASX Listing Rules, and if approved will reduce the number of shares on issue to around 60.5 million.
Cancellation of Loyalty Option Issue
Ezenet has decided not to proceed with a non-renounceable offer of options to shareholders who are on the register at a record date approximately three months after the company is re-admitted to the ASX.