Adelaide, May 11, 2006 AEST (ABN Newswire) - Metallica Minerals Limited (ASX: MLM) has announced a $2 million capital raising to further accelerate development of its NORNICO heap leach nickel laterite project in North Queensland.
Metallica will make a placement of 8 million shares to Resource Capital Fund III LP (RCF), a $US240 million private equity fund based in Denver, USA, with a mandate to make investments in development and growth stage mining companies across a diversified range of commodities.
"This placement is a key part of further funding to accelerate Metallica's programs to develop the flagship NORNICO heap leach nickel project," Metallica Managing Director, Mr Andrew Gillies, said today.
"We are currently targeting a resource containing in excess of 200,000 tonnes of contained nickel by mid year (the current resource contains 161,000 tonnes), sufficient for a 15 to 20 year heap leach mine life, and RCF's investment will assist in expediting this milestone.
"A major portion of these funds will be committed to Metallica's 100% owned NORNICO project and will be used to advance the ongoing atmospheric heap leach metallurgical testwork, bulk sampling and leach tests, undertake additional resource drilling to upgrade the Inferred Resource to Indicated and Measured Resource category, environmental work and a pre-feasibility study," he said.
At an issue price of 25 cents a share, the placement will raise A$2 million. RCF will also be issued 4 million 40 cent options to subscribe a further $1.6 million by 30 June 2008.
The placement will represent approximately 8.8% of Metallica's expanded, undiluted share capital and follows a similar capital raising and strategic alliance with listed Australian zinc-copper producer, Kagara Zinc Limited, in December 2005 and March 2006. No commission or other fees are payable on the placement to RCF. Following the placement Metallica will have funds on hand of more than A$5 million.
A scoping study, being prepared for the NORNICO heap leach nickel project by Aker-Kvaerner, is expected to be received by Metallica later this month.
Metallica also announced that Mr. Peter Nicholson has been appointed as a Director of Metallica as RCF's nominee. RCF retains the right to nominate a Director so long as it retains its entire holding of 8 million shares. Mr. Nicholson holds a BEng (Mining) and Graduate Diploma in Applied Finance and Investment. He has previous experience in mining, mine production planning and management, including with LionOre Australia (Nickel) Limited where he was the Underground Manager of the Emily Ann nickel mine, and prior to this with WMC Resources Limited.
Subject to Shareholder Approval, Mr. Nicholson, RCF or nominee will be issued 500,000 options to acquire shares in Metallica at 25 cents per share on or before December 31, 2008.
Founding (1997) non-executive director, Mr Robert Pyper has resigned effective upon Mr. Nicholson's appointment, thereby maintaining a five person Board. We take this opportunity to publicly thank Robert for his steady hand, support and contributions to the company, particularly during the challenging times in Metallica's early evolution. Robert's contributions have been, and will always be, greatly appreciated.
Source:
Peter Gill
Senior Consultant
FIELD PUBLIC RELATIONS
231 South Road
MILE END SA 5031
Tel: 08 8234 9555
Fax: 08 8234 9566
Mb: 0417 784 059
peter@fieldpr.com.au
Contact
Mr Andrew Gillies
Managing Director
Metallica Minerals Ltd
TEL: +61 7 3891 9611
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