Global finance and investment giant Sprott Asset Management is among the sophisticated investors participating in Cobre Limited’s (ASX:CBE) latest raising for $5m to continue its Ngami copper exploration project in Botswana.
Targeting the prolific Kalahari Copper Belt, a geological formation which stretches across multiple nations in Africa, Cobre earlier this year drew dramatic gains from the market when it repeatedly turned over drill cores with rich visible copper mineralisation.
Back in August, the company’s share price went up 267% in one week. It has since receded in line with macro headwinds, but last week also landed on Sandfire Resources’ (ASX:SFR) radar.
Sandfire and Cobre will jointly fund the costs of a new airborne electromagnetic (EM) survey to be flown over the Ngami project envelope; that process kicks off this month.
The placement shares were offered at 15c, which represents:
11.8% discount to Friday’s closing price
18.6% discount to five day Volume Weighted Average Price (VWAP) of 18.4c
28.3$ discount to the ten day VWAP of 20.9c
Existing major shareholder Metal Tiger’s purchase of $1m worth will be subject to approval at an Extraordinary General Meeting (EGM) to be held in the near future.
That EGM will be held in “late February [to] early March.”
Interestingly, two exploration service providers attached to Ngami’s operations have also taken part in the placement.
Botswana-based Mitchell Drilling has bought US$0.4m worth of shares (A$0.59m), and Remote Exploration Services (RES) have gone for a smaller parcel at US$0.07m (A$1.04m).
Further, the company will launch yet another Share Purchase Plan (SPP) to eligible shareholders in both Australia and New Zealand, to raise a further A$1m.
All in all, Cobre stands to make $6.7m (after fees).
“With Cobre’s current $4m in cash at bank, combined with the funds raised through this Placement, Cobre will have a total of ~$10m that will be used to fund a substantial drill program,” company chief Martin Holland said.
“The Placement was well supported by our existing and new shareholders, who we thank for supporting the Board.”
Sprott’s involvement is worth noting, even though $2m for the global asset manager may not be that much money. The company manages a number of ETFs backed by physical holdings of bullion metals with a particularly strong footprint at the Royal Canadian Mint.
Copper is an emerging battery metal.
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