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Ram Resources To Build Rare Earths Resource Inventory At Motzfeldt With A$3m Capital Raising

Ram Resources (ASX: RAM) is building momentum at its Motzfeldt Project in south Greenland with a proposed capital raising of up to A$3 million.

The Aries prospect at the Motzfeldt Project has the potential to become a notable zirconium project in the world market, with contributions from tantalum, niobium and rare earth elements.

While the zirconium has presented itself as the main focus, all of the mineral products can contribute to the economics of the project and diversify the commodity risk.

Ram has launched a share purchased plan offering $2.4 million worth of shares to eligible shareholders at $0.002 per share, representing a 50% discount to last Friday's closing price.

RM Corporate Finance has been appointed as Lead Manager and Corporate Advisor and has undertaken to place any shortfall from the share purchase plan.

Eligible shareholders will be able to purchase up to a maximum of $15,000 worth of shares.

Ram is also planning to issue a $600,000 convertible note, which can be drawn down at $50,000 per month at an interest rate of 4%.

The conversion price will be at the lower of $0.002 or 85% of the five day volume weighted average price of Ram shares.

The funds raised will be used to continue exploration progress at Motzfeldt.

Milestone maiden Resource

Earlier this year Ram reached the major milestone of an initial JORC Inferred Resource for the Aries prospect of 340 million tonnes at 120 parts per million tantalum, 1,850 parts per million niobium, 4,600 parts per million zirconium and 2,600 parts per million total rare earth oxides (TREO).

This Resource has been estimated to produce contained metal of nearly 1.6 million tonnes of zirconium, 884,000 tonnes of TREO, 629,000 tonnes of niobium and 41,000 tonnes of tantalum.

The Inferred Mineral Resource correlates well with the previously announced exploration target of 200 to 500 million tonnes at 1,800 to 2,200 parts per million niobium, 130 to 160 parts per million tantalum and 3,000 to 5,000 parts per million TREO.

Highlighting the high grades being returned from Aries, previous notable intersections returned earlier this year include:

- 57 metres at 2,113 parts per million niobium, 213 parts per million tantalum, 2,196 parts per million TREO and 6,052 parts per million zirconium; and
- 44 metres at 2,067 parts per million niobium, 246 parts per million tantalum, 4,900 parts per million TREO and 9,475 parts per million zirconium;
- 50 metres at 2,246 parts per million niobium, 265 parts per million tantalum, 3,163 parts per million TREO and 7,341 parts per million zirconium.

Further upside at the project is derived from the potential to increase the Aries Resource, particularly to the south.

The 2011 drilling program confirmed mineralisation some 300 metres to the north and northwest of previously drilled areas.

The area of the mineralised zone now covered by drilling extends 600 metres from north to south and 250 metres east to west.

Ram is currently drilling along strike and at depth to build on the Aries Resources.

Motzfeldt Project

The Motzfeldt Project is located 60 kilometres northwest of Greenland Minerals & Energy's (ASX: GGG) Kvanefjeld Project, which hosts a total Resource of 619 million tonnes containing 6.6 million tonnes total rare earth oxides, 350 million pounds of uranium and 3 billion pounds zinc.

Ram Resources currently holds a 51% interest in Motzfeldt, with the option to earn up to 100% through the acquisition of UK company Greenland Resources, which holds the remaining 49%.

Analysis

The Aries prospect at the Motzfeldt Project has the potential to become a notable zirconium project in the world market, with contributions from tantalum, niobium and rare earth elements.

While the zirconium has presented itself as the main focus, all of the mineral products can contribute to the economics of the project and diversify the commodity risk.

With this in mind, Ram has a market cap. of just $4 million and an enterprise value of just $3.8 million which seems undervalued when you consider the potential for Ram to define a sizeable economic rare earths deposit in Greenland, just 60 kilometres northwest of Greenland Minerals & Energy's 619 million tonne Kvanefjeld Project.

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