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Baobab Resources
- BY: Andrew Hore |
- POSTED: 20/10/2009 |
- COMMENTS: Add yours
Baobab Resources has raised £2.75m gross at 6p a share.
The cash will be used to finance further exploration in Mozambique. Boabab has enough cash to develop its Tete project until 2010. The placing also brought in new institutional investors.
At 7.125p a share, down 1.375p, Baobab is valued at £7.78m prior to the placing. The share price had quadrupled over the past three months, prior to this share price fall. The shares are less than half the price they were at their 12 month peak in September.
Baobab is exploring for iron ore, base and precious metals in Mozambique. The main interest is the Tete iron, vanadium and titanium project. The Chitongue Grande prospect in the area has an inferred resource of 47.7m tonnes. An independent assessment concludes that there is 400 to 700m tonnes of mineralisation to a depth of 250 metres below the surface in the greater Massamba area of the licence. This project could eventually underpin an operation processing up to 10m tonnes per year for 30 years.
A recent conceptual scoping study recommended that further project development work is undertaken. Key sensitivities have been identified and these will need to be addressed.
Further updates will be published over the coming months.
Broker Astaire, which handled the placing, has been issued options over 2.05m shares at an exercise price of 6p each. The options expire on 27 October 2012.
Baobab raised £2.2m at 10p a share when it joined Aim on 1 February 2007.
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