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Red Mountain Mining's new funding to fast-track DFS and permitting

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Red Mountain Mining has secured new strategic funding for the Batangas Gold Project in the Philippines.

Red Mountain Mining (ASX:RMX) has secured new strategic funding for the Batangas Gold Project in the Philippines.

An additional US$220,000 in funds is from Bluebird Merchant Ventures Ltd.

Funds will be allocated to fast-track the Definitive Feasibility Study and all permitting inputs towards completion by the third quarter 2015.

Batangas has already received local government endorsement for the project which is a critical step in the final mine permitting process.

Batangas has now been endorsed by all directly affected Local Government Councils, having already received the required endorsement of the ten Barangay (township) Councils earlier in the year.

Adding interest, Red Mountain is also in discussions with potential candidates for toll processing and/or ore sales of early mining targets.

This could potentially provide early cashflow for the company prior to the establishment of processing facilities for the greater resource based project.

Jon Dugdale, managing director, commented:

“This additional Bluebird funding will allow us to continue the DFS and permitting processes at full pace.

"Completion of the DFS and mine Permitting are the key near-term milestones for the Company, as we look to develop the Batangas Gold Project and become a cashflow producer as soon as possible.”


Funding details


The additional funding of US$220,000 is being paid to Red Mountains’ wholly owned subsidiary Red Mountain Mining Singapore Ltd (RMMS), pursuant to a signed converting loan agreement with a significant new Bluebird investor.

This agreement reflects the conversion terms in the Agreement, with the addition of an extended 1 October 2015 date for completion of Stage 1 funding.

This additional investment will take total project level funding under the Agreement to US$500,000, meeting commitments to 9 June 2015.

Bluebird will now endeavour to complete the Admission process on the Alternative Investment Market of the London Stock Exchange as soon as possible.

Funds raised by Bluebird as part of the AIM Admission will include funding to complete the US$1 million Stage 1 commitment in the Agreement, an additional US$500,000.

These funds will be used to finalise the Batangas Gold Project DFS and Permitting requirements and earn Bluebird 15% of RMMS.

The Stage 2 commitment in the Agreement, US$4.5 million, is subject to completion of the DFS and Permitting and will fund detailed design and initial development, earning Bluebird 50% of RMMS.

This may include potential early mining and toll processing/ore sales based on the initial high-grade surface material at South West Breccia


Analysis

In total, the Bluebird Merchant Ventures funding represents a “see-through” valuation for 100% of the Batangas Gold Project of around A$13.4 million, over three times the current $4.5 million market cap. of Red Mountain.

Upcoming key catalysts:

- The Definitive Feasibility Study including all permitting inputs by the third quarter 2015.

- Any progress on discussions with potential candidates for toll processing and/or ore sales of early mining targets.

- Exploration results.

- A new resource model.

Batangas currently has a global JORC 2012 Indicated and Inferred Resource of 6.19 million tonnes at 2.2g/t, or 444,000 ounces of contained gold and open pit mining inventory of 174,000 tonnes at 6.8g/t gold.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

Quick facts: Red Mountain Mining Ltd

Price: 0.009 AUD

ASX:RMX
Market: ASX
Market Cap: $9.12 m
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