Shares of Havilah Resources Ltd [ASX:HAV] continue to rise thanks to Tuesday’s feasible PFS study as well as news of a $100 million agreement with the GFG Alliance.
At time of writing, the share price sits at 14 cents.
Havilah Resources is a South Australian-based mineral and iron ore explorer. The agreement with the GFG Alliance (owner of the Whyalla Steelworks and other iron ore facilities) is intended to advance Havilah’s iron ore and copper work programs, and to ‘provide a clear pathway to potential commercialisation.’
A ‘transformational’ deal for Havilah
The cash ‘injection’ from SIMEC Mining, a member of GFC Alliance, will go to fund iron ore and copper prospects located in the Mutooroo Copper-Cobalt District in northern SA.
The deal is a significant stepping stone for Havliah given the Alliance’s backing, which has the capacity ‘to support and facilitate the future growth’ of the company.
The funding will be provided through a series of equity placements at a premium of 35%, over a period of three years, which could potentially deliver GFG with a 51% stake in Havilah and direct interest in iron ore assets.
A further $50 million for ‘conditional or discretionary spending’ in exploration and technical investments.
A discounted pro-rata rights issue will also be offered to shareholders, subject to shareholder approval, but before any placement to GFG.
This is attached to this week’s positive prefeasibility study results for the Kalkaroo Project, which suggests new pits producing copper (up to 30,000 tonnes per year) and (72,000 ounces per year) will be feasible.
What does this mean for Havilah?
According to Havilah, the agreement is transformational as it provides several opportunities, including:
- The advancement of two key projects to DFS milestones in the next three years
- Opens the door to international markets and commercial support
- Flexible investment terms
- Access to steelworks and facilities at Whyalla
- Havilah maintains control of projects and remains independently directed
This is only the beginning of a three-year plan. For now, Havilah will be firmly focused on the potential large-scale copper project, and expanding gold and iron ore resources.
More to come.
For Money Morning
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