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Stonewall Resources to open SPP for Rietfontein Gold Mine

Shares in Stonewall are trading up 55% year to date to $0.025.

aerial view of processing plant at TGME project
The company sees a pathway to gold production in 2018

Stonewall Resources (ASX:SWJ) plans to open a share purchase plan to its eligible shareholders on Thursday, 12 October, 2017.

Eligible shareholders as of yesterday at 7:00PM AEST will be given the opportunity to subscribe for shares valued at up to $15,000.

WATCH NOW: Stonewall Resources opens a share purchase plan to push ahead with South African projects

The funds raised under the SPP will be applied towards the pre-feasibility study for the Rietfontein Gold Mine located in South Africa as well as drilling across multiple projects.

Stonewall's core focus is the TGME project in South Africa, which is located in a gold-rich region and has past historical production records.

TGME has an existing CIL plant which is under refurbishment, and the nearby mines such as Rietfontein provide the pathway to gold production potentially in 2018.

Share purchase plan details

Each share offered under the SPP will be issued at a price of $0.024 and come with an attaching 1:2 unlisted option exercisable at $0.036 and expiring within 18 months.

The directors reserve the right to place any shortfall shares under the SPP.

The proposed timetable is:

- 21 September: Record date;
- 12 October: Offer opens and prospectus despatched;
- 10 November: Offer closes; and
- 16 November: Issue date of new shares.

Use of funds

The funds raised under the SPP will be applied towards:

- The Rietfontein Gold Mine pre‐feasibility study;
- Reserve drilling at Rietfontein;
- Resource definition drilling at both Theta Hill and Columbia Hill within Project Bentley; and
- To provide additional working capital.

Advancing the scoping study

In May 2017, a scoping study into the combined development of the Rietfontein and Beta gold mines demonstrated that up to 100,000 ounces per annum gold production is achievable.

Estimates from the scoping study suggest a cash cost of <US$500 per ounce with a peak capital requirement of US$29 million. 

Average mill feed grades of close to 7g/t gold and an all-in sustaining cost (AISC) of US$624 per ounce were also estimated.

Pre‐feasibility work is ongoing with drilling, metallurgical testwork and refurbishment/expansion of the TGME processing plant planned.

Plans to drill Project Bentley

Earlier this month, results of ongoing geological studies at Theta Hill in the vicinity of the TGME plant identified five reefs.

An Exploration Target of 1.2 to 1.7 million tonnes at 16.6 to 26.6 g/t gold was estimated for the Lower Theta seam.

A further Exploration Target of 2.4 to 3.9 million tonnes at 1.9 to 3.2 g/t gold was identified for the overlying Beta reef.

These targets are a priority for Stonewall as any high-grade, shallow mineralisation outlined could supplement underground feed from Rietfontein, and potentially lift future production levels.

Drilling and resource estimation work is planned following receipt of funding with a priority to identify potential shallow open cut and underground low‐cost ounces in Stonewall’s fully permitted mining leases.

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