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Berkeley Mineral Resources raises £2.05 mln to exercise Kabwe tailings option

Berkeley Mineral Resources (LON:BMR) has conditionally placed 136.6 million shares to raise £2.05 million in order to exercise the option to secure the rights to process the remaining tailings dumps acquired at the Kabwe mine in Zambia, as announced in June.

The placing price of 1.5 pence compared to yesterday’s closing price of 2 pence.

The placing is conditional on the option being exercised, which is expected on or around 19 August when the company will complete its legal and metallurgical due diligence on the tailings dumps.

The company said that the rights to process the further stockpiles of zinc and lead tailings would strengthen the economics of the project. There are an estimated 7 Mt (million tonnes) of high-grade lead and zinc tailings with associated minerals. Sales of lead and zinc are set to commence in the fourth quarter of 2010, helping Berkeley generate early cash flow with an aim to move into profit.

“These additional funds will allow BMR to proceed promptly with the exercise of the option following resource verification, which we expect to be completed very shortly.  All the material has already been mined and is above ground and all the necessary infrastructure is in place,” said chairman Masoud Alikhani.

The Kabwe deposits, located approximately 110km north of the Zambian capital Lusaka, were discovered in 1902. By the time the operations closed in 1994, it had produced about 1.8 Mt of zinc, 800,000 tonnes of lead, 7,800 tonnes of vanadium pentoxide and lesser quantities of cadmium, silver and copper.