Breakaway Resources' (ASX: BRW) ongoing exploration activities are focused on its priority Eloise Exploration Project (copper-gold and silver-lead-zinc) located within the Cloncurry District of North-West Queensland, and the Wildara and Miranda Projects (nickel) located within the Leinster District of Western Australia’s North-Eastern Goldfields.
Breakaway Resources announces $3.6 million rights issue
Breakaway Resources (ASX: BRW) has announced that it intends to undertake a 1-for-3 non-renounceable rights issue at an issue price of 6.0 cents per share to all eligible shareholders to raise $3.6 million.
The funds raised will increase Breakaway’s cash resources to $5.1 million (net of costs) and will primarily be
used to accelerate exploration across Breakaway’s portfolio of high quality nickel sulphide projects in
Western Australia’s Northeastern and Eastern Goldfields, in particular the Wildara Project Group and the
Saints Nickel Target (Scotia Project).
The proposed issue price of 6.0 cents represents a discount of 33% to the last sale price of Breakaway shares
of 9.0 cents and discounts of 30% and 40% to the 5-day and 30-day VWAP of 8.7 cents and 10.2 cents
respectively.
Following completion of the rights issue, Breakaway will have approximately 239.3 million shares on issue,
with cash resources totalling approximately $5.1 million (net of costs) including existing cash at bank.
The proceeds of the raising will provide a strong foundation for the Company to progress the exploration and
evaluation of its portfolio of high quality nickel sulphide assets in Western Australia.
In addition to working capital, the funds will be applied to drill testing in early 2010, a number of exciting priority nickel targets on the Wildara Project Group, including the Revolution-Horn Trend, Fly Bore-Hill Top Trend, Firefly, Sinclair Trend, and Yillaree North.
The funds will also go towards further drilling and exploration activities at the priority Saints Nickel Target (Scotia Project), where drilling recently tested down-plunge extensions to mineralisation previously identified on the Western Contact and reviewing divestment opportunities to realise additional value from Breakaway’s portfolio of nickel sulphide and base metal assets in Western Australia and Queensland.
Breakaway Chief Executive David Hutton said he was pleased to be able to offer existing shareholders the opportunity to acquire more shares at a substantial discount to the recent trading price of Breakaway shares.
“We have recently embarked on a major new exploration push within our portfolio of high quality nickel
sulphide assets in Western Australia, with a drilling programme currently in progress at the Saints Project,”
Mr Hutton said.
“The funds raised will enable us to step up activity levels next year across our portfolio while at the same time
pursuing a number of exciting commercial opportunities to add value for shareholders."
Breakaway recently secured a $10 million joint venture with BHP Billiton at its Altia silver-lead-zinc deposit,
part of the Eloise Exploration Project in North Queensland.
BHP Billiton is expected to commence up to 5,000 metres of diamond drilling at Altia, upon the completion of the wet season in early 2010.
Breakaway remains focused on its core nickel sulphide assets in Western Australia.
