Metminco Limited (ASX: MNC) is an exploration and mining company incorporated in Australia, that holds interest in a portfolio of copper, gold and other base metal projects situated within well-constrained metallogenic belts associated with the Andean Cordillera in Chile and Colombia. The company’s key focus is the Andes and Quinchia Portfolios in Colombia, which are about 70km apart and situated in Colombia’s Mid- Cauca Au-Cu porphyry belt.
Located in the highly fertile Mid-Cauca gold belt, the Quinchia portfolio comprises several gold deposits and major exploration and development targets including Miraflores gold deposit, Tesorito and Chuscal gold targets.
Metminco has recently released its quarterly report for the period ending September 2019 on the ASX.
The company attained a significant milestone in September 2019 quarter with completion of the merger with Andes Resources, establishing a leading gold explorer of Colombia with dominant positions in two gold districts of the well-endowed Mid- Cauca Belt.
The following activities were undertaken by the company during the quarter:
Conclusion of Merger with Andes Resources
The company successfully completed the merger with the Andes via an off-market takeover offer during the quarter. The merger brought together the company’s advanced Quinchia Gold Project, with Andes’ extensive tenement holding to establish a company with multiple exploration assets in prosperous gold camps.
The takeover was completed pursuant to:
- Completion of a fully subscribed capital raise of $2.3 million in line with the prospectus, underwritten to $1.3 million.
- Execution of the Debt Financing Agreement with the major shareholder RMB Resources, with revised terms consisting of a debt for equity swap for $2 million and repositioning of future payments of $3.5 million to project milestones out to 2025.
- Consolidation of Metminco’s s share capital on a 1 for 40 basis to bring the shares on issue to a more manageable amount suitable for a junior explorer. Following the share consolidation, the number of the company’s shares on the issue was reduced from 6.6 billion existing shares to about 166.5 million shares. This transaction was completed in October 2019.
- Considerable refreshment of the Board of Directors, including the appointment of Messrs Jason Stirbinskis as Managing Director and Ross Ashton as Non-Executive Director to the Metminco’s Board and the resignation of Messrs Roger Higgins and Glenister Lamont from the Board as Non-Executive Directors.
Completion of Strategic Review and Prioritisation of Metminco’s Expanded Portfolio of Titles and Applications
The company completed a strategic review of all previous exploration, known targets and existing resources on its projects during the quarter.
The review involved the following developments:
Commenced Maiden Drilling Program at Chuscal Gold Target
Metminco commenced the diamond drilling program at Chuscal gold target near the end of the quarter, under which the drilling is indicatively planned to target an average depth of 300 to 400 meters in each drill hole.
The company notified that the diamond drilling program will be a two-phase operation. It has planned to initially drill three holes, and then move further up to four holes, with the benefit of knowledge obtained through analysis of the outcomes from the first phase of drilling.
The company has recently reported about the conclusion of first Chuscal drill hole of the maiden drilling program, completed at a depth of 452.5 metres after passing through approximately 274 metres of hydrothermal alteration and breccias.
The company informed that the first samples from CHDDH001 have been despatched to ALS laboratory in Medellin for assay and the second batch will be despatched soon on completion of the geologic logging of the core. The company expects to receive a robust flow of assay results from November 2019 end through to February 2020.
Activities Subsequent to September 2019 Quarter
The company reported the following activities post the September 2019 quarter:
- Completion of first Chuscal drill hole of the maiden drilling program.
- Execution of a term sheet (non-binding) for selling its non-core and legacy Mollacas asset in Chile to Agricola Bauza Limited. The company intends to sale Mollacas assets for a non-dilutive capital injection of ~$1.5 million that will help it drive exploration push which recently began with the commencement of diamond drilling at Chuscal gold target.
- Intention to re-brand itself as Los Cerros Limited to mark the beginning of the next thrilling chapter of the enterprise.
Cash Flow Position
The company recorded a cash balance of $749k at the end of the quarter and has estimated a cash outflow of $1.4 million for the next quarter. The company expects to spend $1.02 million on exploration and evaluation activities in the next quarter.
Metminco anticipates being able to meet its business objectives in the near term and is reviewing its capital raising options over the next two quarters.
Stock Performance: MNC ended the trading session at $0.097 on 7th November 2019, with a rise of 3.2 per cent. The stock has generated a return of 19 per cent in the last one month.
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