The Board of EHR Resources Ltd (ASX: EHX; “EHR” or “the Company”) is pleased to provide its quarterly activities and Appendix 5B cashflow report for the quarter ended 30 June 2020.
- Significant growth in project portfolio
- Earn-in agreement over world-class Naujaat diamond project in Nunavut, Canada
- Diamond exploration alliance agreement with project generator partner in Botswana
- Funding secured with capital raising of up to A$12m
- A$3.5m first tranche successfully completed, with further A$6.5 committed by investors in second tranche, subject to shareholder approval in August
- SPP for up A$2 million offered to existing shareholders at same price as institutional investors, closing 29 July 2020
During the quarter, the Company made significant progress in its growing focus on targeted investment in diamond exploration and project development in stable mining jurisdictions around the world. This included acquiring interests in both advanced and early stage diamond exploration projects, carefully managing the near term and longer term capital requirements and project development pipeline.
An earn-in agreement with TSX-V listed company North Arrow Minerals Inc. over the Naujaat diamond project in the Nunavut territory of Canada provides EHR with exposure to an advanced world class diamond exploration project with a highly respected diamond sector partner. This was complemented by an exploration alliance in Botswana with privately-owned Diamond Exploration Strategies Ltd, providing early stage exploration exposure over five highly-prospective areas in Botswana.
Funding for the continued execution of the Diamond sector strategy was supplemented by a capital raising of up to A$12m, with commitments received from institutional and sophisticated investors for A$10 million via a new share placement. The first tranche of this, for approximately A$3.5 million, was successfully completed on 29 June 2020, with the second tranche of approximately A$6.5 million subject to shareholder approval at an extraordinary general meeting to be held on 4 August 2020.
The capital raising was accompanied by a Share Purchase Plan (SPP) for up to an additional A$2 million, to allow eligible existing shareholders an opportunity to participate in the capital raising at the same price as the Placement. The SPP will close on 29 July 2020.
EHR Managing Director, Mr Peter Ravenscroft, said the Company was able to make significant progress on its diamond strategy during the uncertain economic environment resulting from the ongoing COVID-19 pandemic.
“While the current economic situation has required even more focus on disciplined capital management, it is also providing increasing opportunities for EHR’s strategy of counter cyclical investment in high-quality diamond assets,” Mr Ravenscroft said.
“We will continue to pursue this fiscally-prudent strategy in the second half of the 2020 calendar year, which will underpin long-term growth of shareholder value.”
Read more Mining Review