Bright Opportunities ahead for Krakatoa based on Market Cap and Stronger Balance sheet

  • Oct 18, 2019 AEDT
  • Team Kalkine
Bright Opportunities ahead for Krakatoa based on Market Cap and Stronger Balance sheet

KTA’s market cap is only ~$8m, providing a powerful leverage play when you look at the following market cap comparisons in the same Molong Volcanic Belt in NSW, being:

  • Newcrest Mining Ltd (ASX: NCM) market cap of $28 billion (Flagship Cadia Project) 40 Km in same belt South of KTA;
  • Alkane Resources Ltd (ASX: ALK) market cap of $275 million (Flagship Boda Project) 70 Km in same belt North of KTA;
  • Alice Queen Ltd (ASX: AQX) market cap of $40 million (exploration tenements) North of ALK in same belt but off the map

See map below

Regional TMI RTP Map of Molong Volcanic Belt. Note: Alkane (ASX: ALK) ~70Km North of KTA in Blue and Newcrest (ASX: NCM) ~ 40Km to the South in Yellow. (Source: Company Reports)

Krakatoa Resources to Pay Cash Purchase Consideration for Belgravia Project Acquisition

Australian exploration company Krakatoa Resources Ltd (ASX: KTA) announced on Friday that it has completed the Belgravia Project acquisition.

KTA to raise $750k via Placement

As announced on 16 October 2019, the company has received firm commitments from professional and sophisticated investors to raise $750,000 through a placement of 15 million ordinary shares at an issue price of $0.05.

The funds received from the placement will be used to pay the cash purchase consideration for the Belgravia Acquisition. And the remaining funds will be used to fund the proposed exploration activities at the Project.

KTA will have only 165m shares on issue after this $750K placement with its shares trading just under 5c.

Trading Halt Lifted

Following the release of the announcement, the trading halt on KTA securities was lifted. KTA’s stock closed the day’s trade at a price of $0.047 (On 18 October 2019).

KTA and Belgravia Deal Explained

As announced on 26 September 2019, KTA struck a deal with Locksley Holdings to acquire a 100% interest in the Belgravia Project for the following consideration:

  • 10,000,000 ordinary shares
  • $300,000 cash
  • 1% net smelter royalty

The binding term sheet signed with Locksley Holdings granted 21-day option period to undertake due diligence at the project. The findings from the field due diligence confirmed the prospective nature of the Project and the 6 initial targets, which are as follows:

  1. Bell Valley (Copper Hill NE)
  2. Guanna Hill
  3. Shades Creek
  4. Sugarloaf Creek
  5. Strathmore
  6. Nandillyan
Major field findings include:
  • Belgravia lies in a very fertile metallogenic province, where copper-gold porphyry deposits typically occur in clusters, providing considerable potential for more discoveries;
  • Large-scale and pervasive alteration identified, particularly at the Bell Valley Target, which lies over the eastern parts of the Copper Hill Igneous Complex;
  • Intense proximal albitisation and silica-saturation observed, similar to zonation seen at Newcrest’s Cadia East Mine by experienced porphyry geologist and mining engineer Mr Ian Cooper;
  • Bella Prospect, a doughnut-shaped magnetic pattern considered characteristic of a porphyry intrusion, lies within 1km of noted alteration;
  • Exceptionally located with the recently upgraded Mitchell Highway providing direct access to the Belgravia Project from the regional centre of Orange and township of Molong.

After completing the legal and technical due diligence on Exploration Licence 8153, comprising the Belgravia Project, KTA provided written notice to Locksley Holdings that it has elected to exercise the option to purchase the Belgravia Project.

About Belgravia Project:

Located in the central part of the Molong Volcanic Belt (MVB), Lachlan Fold Belt, NSW, the Belgravia Project is highly prospective for:

  • Porphyry copper-gold systems akin to the Cadia Valley porphyry cluster and Alkane’s Northern Molong Porphyry Project (refer below image)
  • High-grade gold skarn mineralisation similar to Junction Reef.

The company appointed Stephen Woodham, an exploration consultant with over 30 years’ experience in mining and exploration, as NSW Exploration Consultant.

The company believes that the earlier exploration work at the project has not adequately considered the regolith and tertiary basalt (up to 40m thick) that obscures much of the prospective geology.

On 8th October 2019, KTA announced that it has appointed Rangott Mineral Exploration Pty Ltd, a leading exploration consulting company, as its NSW exploration contractor with an intention to leverage Rangotts’ decades of experience in regional geology and exploration targeting, tenement management, community and government relations.

Rangott provides following services to exploration and mining companies:
  • Exploration targeting and devising of exploration programs to cost-effectively explore for porphyry styles of mineralisation;
  • Management of exploration programmes and interpretation of results;
  • Provision of field staff;
  • GIS services;
  • Hire of equipment and vehicles;
  • Core cutting, secure storage of clients’ samples;
  • Securing of approvals and statutory reporting and compliance.

KTA has started planning the next stage of ground-based exploration and is working with its experienced NSW technical operations team on detailed target generation. The company expects the acquisition to complete by late November 2019.


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