Ragnar Metals Makes Strategic Investment in Kaiser Reef
Australian exploration company Ragnar Metals has entered into a strategic investment agreement with compatriot gold miner Kaiser Reef. This agreement involves Ragnar Metals acquiring a stake in Kaiser Reef at A$0.15 per share without any discount.
The investment also includes Ragnar Metals gaining representation on the board of Kaiser Reef. The total investment is valued at just over A$5 million and will be completed in two tranches by 18 July 2024.
Two-Tranche Placement Details
The first tranche consists of 6.2 million shares and 3.1 million unlisted options with a value of A$980,000. The second tranche involves 27.2 million shares and 13.6 million unlisted options worth A$4.08 million.
Moreover, Ragnar Metals will receive a 1.5% net smelter return royalty on gold produced from the A1 Gold Mine for a five-year period starting 1 July 2025.
Utilization of Capital
The capital raised from this placement will fund the establishment and deployment of a dedicated team for the Nova Gold Project. This team will operate independently alongside the current mining crews until the Nova Gold Project is commissioned.
Leadership Changes
As part of the agreement, Ragnar chairman Steve Formica has been appointed as the non-executive chairman of Kaiser Reef. Subject to shareholder approval, Kaiser Reef will also issue two million unlisted options to Formica which can be exercised at A$0.25 each and will expire four years from the date of issue.
Insight:
The strategic investment decision by Ragnar Metals followed an extensive period of due diligence, focusing on the start of mining operations at Kaiser Reef’s A1 Nova Gold Project.
The Nova Gold Project is renowned for hosting high-grade gold mineralization that remains unmined at levels of the A1 Mine. Development of the A1 Nova mine is anticipated to significantly enhance high-grade gold production, transitioning from a remnant gold mining operation that has been active for the past 40 years.
Kaiser Reef has invested approximately $24 million in capital costs to access the Nova Gold Project, situated below the existing mine workings. Notably, significant upgrades to power, fleet, and ventilation systems have been made in readiness for the upcoming mining operations. The engineering plan for the A1 Nova mine aims to establish a modern mine layout, addressing the limitations faced by the current operations.
