SYDNEY, AUSTRALIA: Carbine Resources Limited (ASX: CHK | OTCQB: CHKMF), a diversified mineral exploration company, has announced that it has signed a binding term sheet to acquire 100% of the Silica Sands Project located southeast of Bunbury from Down South Silica Pty Ltd, encompassing a land package of 5,800 hectares (58km2).
The Silica Sands Project offers Carbine an excellent opportunity of a near term development project with significant growth potential whilst the Company continues to advance its exciting Muchea Project in Western Australia.
The Silica Sands Project comprises four properties: the Big Rock, Rogers Creek, Ottertail, and Gathering Lake lithium and rare earth element (REE) properties. The properties are located in a region that hosts several advanced lithium and REE projects, such as the Separation Rapids project of Avalon Advanced Materials Inc. and the Mavis Lake project of International Lithium Corp.
The acquisition is subject to CHK shareholder approval, which is required for the issue of 1.5 billion fully paid ordinary shares and 750 million performance rights to the vendors of Down South Silica (Consideration Shares and Consideration Performance Rights). The Consideration Performance Rights will vest upon achieving certain exploration milestones on the properties.
As a condition of the acquisition, Cohiba has also received firm and irrevocable commitments from professional and sophisticated investors for a capital raising of $1.75 million (before costs) (Placement), to be conducted in two tranches. The first tranche of $1 million will be issued without shareholder approval, while the second tranche of $750,000 will be subject to shareholder approval.
Carbine’s CEO, Peter Batten, said: “This acquisition complements the Company’s existing strategy and fits well with its existing plans at its Muchea Project. The Silica Sands Project offers Carbine potential access to near term development whilst it continues to develop its exciting large-scale Muchea Project. Our goal through undertaking this acquisition is to secure the potential for an earlier stage production and subsequent cashflow scenario with the object of self-funding the development of the Muchea Project.”
He added: “Historical exploration has resulted in identifying the locations for potential resources and provided information regarding grades at these locations. Previous resource calculations are not reportable, however, they provide valuable data for Carbine to build on. Discussions with landowners regarding access for exploration and support of potential mining operations convinced Carbine of the potential of the tenement.”
According to Carbine, the Silica Sands Project is located on freehold land with access to key infrastructure including port. The project has historical exploration data that indicates high purity silica sands with over 99% SiO2 and low levels of impurities. A small volume of silica sand was previously mined and exported through the Bunbury Port in 1970/71 and 1988.
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