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Adding another triumph to its exploration goals, Australian battery commodity explorer Comet Resources Ltd (ASX:CRL) has now completed the acquisition of Barraba Copper Project under amended terms, including a reduction in consideration Shares from $450K to $200K.
Reaffirming support for the Barraba Copper Project, the company has effectively received subscriptions for $650K at an issue price of $0.01 per Share, under a placement of 65 million fully paid ordinary shares. Comet has also announced one free attaching option for each issued share, exercisable at $0.02 on or before 30 June 2021.
The raised funds are intended to be utilised for supporting Comet in NSW based Barraba Copper Project acquisition and for initial project works.
The exciting news sent the stock soaring 9.1% on ASX, settling the day’s trade at $0.012 on 16 April 2020.
With the latest acquisition, Comet Resources now holds two battery-commodity centric complementary projects including Springdale Graphite Project and Barraba Copper Project.
ALSO READ: Lens Through the Resource Platter of Comet Resources in the Commodity Space
A Glimpse at Capital Raising
Pursuant to ASX Listing Rules 7.1 and 7.1A, a portion of the Placement will be conducted under the company’s current placement capacity through the issue of 54 million Shares at a price of $0.01 per Share (it satisfies the minimum pricing condition under ASX Listing Rule 7.1A.3). The Shares will be issued on pro-rata basis to the subscribers.
The balance of 11 million shares under the Placement will be issued post the shareholder approval receipt.
In due course, Comet plans to lodge a Notice of General Meeting. It would seek shareholder approval for issuing Placement Shares in excess of the current 7.1 and 7.1A capacity of the company, as well as for free attaching 1-for-1 Placement options exercisable at $0.02 and expiring 30 June 2021.
Notably, the new capital raise replaces the capital raise at $0.025 per share announced previously in February 2020, which has now been withdrawn.
Empire Capital Partners Pty Ltd, which has been engaged as the lead manager to the offer, will receive $35K lead manager fee, along with a distribution fee of 6% on monies raised.
Comet, subject to the shareholder approval and on the same terms and conditions, would issue Empire a number of Options equivalent to 6% of the Options to be issued under the Capital Raising for Barraba (being 3.9 million Options on 65 million options to be issued under the Barraba Capital Raising).
Barraba Copper Project and its Potential
Located near the town of Barraba which is ~550 kilometres to Sydney’s North, the project area is covered by 2,375ha exploration license ‘EL8492’. The project area, sitting along Peel Fault Line, incorporates Gulf Creek and Murchison copper mines.
The short-period production of high-quality zinc and copper during the 19th century at Gulf Creek imparts historical significance to the project, attracting initial exploration focus to the area. The proposed acquisition of the NSW based Barraba project lies in proximity to the regional centre of Tamworth.
Potentially attractive drill targets both along the depth and strike from Gulf Creek was demonstrated by Comet’s pre-transaction review. Potentials for volcanogenic massive sulphide mineralisation (VMS) potentially rich in copper, other precious and base metals further enhance the project’s prospects.
Comet believes global attempts towards the emission reduction from transport networks and growing focus directed at renewable energy generation are likely to enhance copper demand. The utilisation of copper in BEVs and motors driving the wheels of BEVs have been a reckoning force augmenting the demand for copper. Moreover, it is also used in the generation of renewable solar and wind energy.
Comet is also confident of the significant potential of governments’ post-Covid-19 fiscal stimuluses to provide a further nudge to the copper demand.
Plans Concerning the Barraba Project
Modern exploration techniques have never been applied to test the Barraba Copper Project systematically. Hence, the initial exploration drive at Barraba would involve drill testing of high-level exploration targets outlined by an IP (induced polarisation) survey of regions of the license area that were never followed up, along with the regions lying beneath the historically discovered deposits.
The company expects the finalisation of the downhole geophysics to be offering additional details about potential blind and parallel lodes, besides the known historical lodes.
As VMS deposits occur in Clusters, Comet Resources is excited regarding the discoveries’ potential for Barraba Project through testing the extent of the previously discovered and partially mined lodes as well as implementing new exploration works.
ALSO READ: Comet Resources Geared Up For FY20 With Robust Project Portfolio
