On 22nd February 2019, Australian mineral exploration and mining company, FE Limited (ASX: FEL) has announced that that it has entered into an acquisition agreement to acquire two projects namely; Pippingarra Lithium Project and the Marble Bar Lithium Project in the Pilbara region of Western Australia from Mercury Resources Group Pty Ltd. The sampling at the site has returned an assay high of 3.72% Li2O, with an average of 1.85% Li2O. Immediately after the acquisition, the comprehensive exploration program is to be commenced on both the projects, having a combined land mass of over 360sqkm.
To raise the funding of $400,000 for the acquisition, the company will issue a placement of fully paid-up FEL ordinary shares at an issue price of $0.02 per share, which is not underwritten. For every two Placement Shares, one unlisted option will be issued at an exercise price of $0.03 each expiring two years from the date of issue. The issue will be made without the approval of the shareholders, using the company’s existing capacity under listing rule 7.1A. Existing shareholders’ stake in the company will be diluted by 5.35% as a result of the issue of Placement Shares. The proceeds from the placement is intended to be used for the working capital.
Pippingarra Lithium Project
The Pippingarra Lithium and Tantalite project which covers an area of 181sqkm is strategically located near one of the largest and most significant commodity export ports in the world, the Port Headland. The project has already been granted two Exploration Licences (E45/4691 and E45/4759). The project runs along a fault paralleling the main Tabba structure which hosts a potential new lithium discovery by Fortescue (ASX: FMG). The project contains high prospect for pegmatite hosted lithium and tantalite mineralisation and contains tantalite occurrences at the excised Pippingarra quarry and Bore Creek prospect. After the transaction has been completed, the company will commence a thorough exploration program.
Marble Bar Lithium Project
Marble Bar Lithium Project covering 186kms, located between 10- and 20-kilometres East of Marble Bar in the East Pilbara region of Western Australia and is approximately 200km away from the south-east of Port Hedland. This project has been granted four exploration licences (EL 45/4669, 45/4690, 45/4724 and 45/4746).
New pegmatite swarms at the project containing lithium had been discovered through Reconnaissance exploration in 2016 by well-known prospectors. New lithium bearing pegmatite swarms at the project had been discovered by Denis O’Meara and Brian Richardson. Lepidolite mineralisation and Spodumene associated with the pegmatites have also been identified within this corridor. The sampling of the rock chip here returned peak values of 3.72% Li2O and 3.32% Li2O with an average of 1.85% Li2O across the 22 samples. The majority of the site here is under-explored. The company will conduct Systematic exploration in order to find any additional Lithium bearing pegmatites within the defined corridor and elsewhere in the Project area.
Despite the positive announcement, the company’s stock fell by 10% on 22 February, settling the day’s trade at A$0.018. Although, the stock has provided an impressive YTD return of 53.85%.
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