Kaiser Reef Limited (ASX:KAU) has closed its applications for IPO early following a very strong response from the market and will now focus on the listing process and gearing up its exploration plans.
Snowden Mining Consultants, the independent mining consultants for the Stuart Town Gold Project, have prepared a schedule for a two-year strategic exploration program with a budget of $2.5 Million. The ease of access and the regional presence of significant infrastructure would assist the project during the exploration and operational phases. The presence of substantial historical gold mining and early exploration results provide sufficient indications of potential mineralisation to pursue further exploration targeting a large intrusive gold system. The exploration costs are based on certain assumptions with respect to the method and timing of exploration.
KAU proposes to:
- Identify and prioritise all structural, geochemical and geophysical targets
- Drill the highest priority targets
- Geophysical programmes to identify of the favourable structure and mineralisation indications
- Sampling and metallurgical test work
- Exploration – The Stuart Town mining district lies on the Lachlan Fold belt which hosted more than 80 gold mines in the past. The region came into limelight with the recent Alkane’s Boda project new gold discovery.
The Lachlan Fold belt is one of the hottest mineral grounds in the region and mining companies of all scales, both producers and explorers are striving hard to get a pie of it. The timing of the capital raisings and, project exploration and development of the Stuart Town mining ground seems to be favoured by the market following the scarcity of the exploratory mining ground in the region.
The Stuart Town Gold property lies in between Australia’s largest & one of the lowest cost gold mines, Newcrests Cadia gold mine and the Alkane’s Boda gold project. The exploration of any mine possesses risks of discovery of an economically feasible ore deposit. The discovery of prospective resources does not guarantee the economically feasible mining and processing of the ore.
Kaiser Reef appointed the Snowden Mining Industry Consultants to present an independent opinion on the historical drilling and geochemical results. The historically exploration such as the Kratos-Freeport JV in 1980s and mining information from the region was analysed.
Snowden Mining expressed the potential of the mining project to yield economic mineralisation and recommended a systematic exploration program as per the budget suggested by Kaiser. The possibility of a large scale and multi commodity discovery is in conjunction with the region’s geology and the similarity of the Stuart Town property with the Ravenswood Gold operations as per the current geological understanding.
- Additional requirements for capital: Under the current IPO, Kaiser reef intends to raise $4.5 Million from 22.5 million units to be issued. The current cost estimates might differ from the scheduled expenses and requirement of any additional equity funding will dilute the shareholdings and may affect the financing and operating activities.
Source: Kaiser Reef Prospectus
Kaiser Reef’s current offering has been a lean offering and possess potential upside in future. The lean offering also provides liberty to raise additional funding via equity or debt to fund its project activities.
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