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Comet Resources' $2 million capital raising endorses planned Barraba Copper Project acquisition

The capital raising satisfies the key condition precedent to progress the acquisition and the company will now seek shareholder approval for both initiatives.

Comet Resources Ltd - Comet Resources' capital raising supports Barraba Copper Project acquisition
An initial drilling program on the Barraba project is planned for Q2 of 2020

Comet Resources Ltd (ASX:CRL) has received firm commitments for a $2 million capital raising which endorses a decision to pursue the acquisition of a copper project in New South Wales.

The capital raising satisfies the key condition precedent to progress the proposed acquisition and Comet will now lodge a Notice of General Meeting, seeking shareholder approval for both initiatives.

Managing director Matthew O’Kane said: “The strong support for this capital raising is a great endorsement from investors for the Barraba Copper Project acquisition and Comet’s evolving strategy.

“We’re already planning an active exploration program for Q2, including an initial drilling program.”

Exploration to test unexplored areas

The Barraba Copper Project has never been systematically tested by modern exploration techniques, however, Comet's initial exploration will include drill testing of areas below the historically identified deposits.

It will also test high-level exploration targets delineated by an induced polarisation (IP) survey of parts of the licence area that were never followed up.

To complement the drill testing, the company will also complete downhole geophysics with the aim of providing additional information about potential parallel and blind lodes, in addition to the known historical lodes.

As volcanogenic massive sulphide (VMS) deposits often occur in clusters, Comet is excited about the potential for new discoveries on the Barraba Copper Project though new exploration works and testing the extent of the previously discovered and partially mined lodes.

Copper to increase in demand

Comet believes that copper is set to see an increase in demand due to global efforts to reduce emissions from the transport network and also from the generation of renewable electricity.

Copper is not only an important part of the batteries used in BEV’s but is also used extensively in the electric motors that drive the wheels of BEVs and is also used intensively in the generation of electricity from renewables, such as solar and wind.

The Barraba CopperPproject complements Comets existing Springdale graphite project in relation to their shared end uses in batteries for BEV’s.

Capital raising details

Under the terms of the offer, the company has received firm commitments to issue 80 million fully paid shares at a subscription price of 2.5 cents per share.

Comet will also issue subscribers one unlisted option with a strike price of 3 cents and an expiry of June 30, 2021, for each share issued under the offer.

Along with the acquisition, the capital raising is subject to shareholder approval and the company expects to lodge the notice of meeting for the general meeting shortly.

Shares in the company have been 16% higher to an intra-day high of 2.9 cents, up from  1.9 cents on January 10.

Quick facts: Comet Resources Ltd

Price: 0.019 AUD

ASX:CRL
Market: ASX
Market Cap: $7.27 m
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