Raisebook

Potential Development Opportunity which Aims to Satisfy Burgeoning Demand for High Grade, Low Impurity Iron Ore
Fenix Resources Ltd
Fenix Resources Ltd
ASX:FEX
  • Emergent Resources (ASX: EMG), to be renamed Fenix Resources Ltd (ASX: FEX), propose to acquire 100% of the Iron Ridge Project near Cue, WA
  • Inferred Resource of 5Mt @ 64.1% Fe, with additional exploration target of 0.7 to 12.6 Mt @ 58 - 65.3% Fe
  • Infill drill programme targeting main Banded Iron Formation (BIF) Unit designed to derive an upgraded resource
  • On re-listing FEX market cap will be circa $8.5M with over $4M in cash, an Enterprise Value of less than $4.5M
  • Raisebook is accepting maximum bids of $6,000 per entity
Raise Amount
$4,500,000
Offer Price
$0.0400
Closes
Sep 26, 2018

Emergent Resources Ltd (ACN 125 323 622) (to be renamed Fenix Resources Limited) is a public company that has been listed on the ASX since August 2008.

The Company has entered into an Acquisition Agreement to acquire 100% of the issued capital of PML, which owns the Iron Ridge Project near Cue, Western Australia.

The Iron Ridge Project offers a potential development opportunity which aims to satisfy burgeoning demand for high grade, low impurity iron ore.

The Tenement has an existing ministerial approval to work and mine for iron ore and has historically been mined for red iron oxide ochre (pigment).

CSA Global has reported an Inferred Mineral Resource and an Exploration Target in accordance with JORC 2012 in relation to the Iron Ridge Project.

The Iron Ridge Project comprises two areas of mapped hematite mineralisation hosted within a banded iron formation (BIF) which contains a high grade (64.1% Fe) Inferred Mineral Resource estimate of 5Mt with low to acceptable deleterious elements at a cut-off grade of 50% Fe.

CSA Global reported the Mineral Resource in accordance with the JORC Code (2012) in April 2018.

In addition CSA Global has reported a JORC Code (2012) Exploration Target for an additional 0.6Mt to 7.1Mt of predominantly hematite mineralisation in a grade range of between 64.1% Fe and 65.3% with low to acceptable deleterious elements, and a further 0.1Mt to 5.5Mt of goethite mineralisation grading approximately 58.0% to 59.5% Fe with slightly elevated deleterious elements.

Following reinstatement to quotation of the Company’s Shares on ASX, the Company’s primary focus will be to develop the Iron Ridge Project into a producing iron ore mine and to actively review additional mineral projects with a view to acquiring one or more development assets.

The Offer

Emergent Resources (ACN 125 323 622), to be renamed Fenix Resources Ltd, is offering 112,500,000 Shares at an issue price of $0.04 each to raise $4,500,000.

The Public Offer comprises:

  • Priority Offer – a priority offer to Eligible Shareholders; and
  • General Offer – an offer to the general public.

Under the Priority Offer, up to 50,000,000 Shares ($2,000,000) have been set aside for Eligible Shareholders. Eligible Shareholders are existing Shareholders on the Priority Entitlement Date who have a registered address in Australia.

The Public Offer is partially underwritten. The Priority Offer is fully underwritten by CPS Capital (AFSL 294848). The General Offer is not underwritten.

In addition, CPS Capital is the Lead Manager and corporate adviser in relation to the Public Offer.

Raisebook is accepting bids of between $2,000 (min.) and $6,000 (max.) for shares under the General Offer.

The offer of the securities are made in, or accompanied by, a copy of the disclosure document which can be obtained by clicking on the "ACCESS DISCLOSURE DOCUMENT" button on this page.

Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the Disclosure Document.

Before making an investment decision, potential investors should read the Disclosure Documents entirely, and seek professional financial advice.

The Acquisition is conditional on the Company re-complying with Chapters 1 and 2 of the Listing Rules. Pursuant to the Acquisition Agreement, the Company has agreed to acquire 100% of PML. Completion of the Acquisition of PML is subject to the satisfaction of certain conditions (as set out in Section 14.2 of the Disclosure Document).

There is a risk that these conditions cannot be satisfied and in turn that completion of the Acquisition will not proceed. If the Acquisition does not proceed, the Company will incur costs relating to advisers and other costs, with no material benefit being achieved.

Capital Structure

Shares Options Performance Shares
Existing Capital Structure 45,398,200
Consideration Securities 25,000,000 112,500,000
Conversion of Convertible Notes 30,000,000
Public Offer 112,500,000
Adviser Options 25,000,000
Underwriter Options 25,000,000
Director Options 9,000,000
Total following completion of Acquisition and Offers 212,898,200 59,000,000 112,500,000

Key Information

Public Offer Amount of Offer
Price per Share $0.04
Number of Shares offered 112,500,000
Vendor Offer
Shares offered to the Vendors (or their nominee/s) 25,000,000
Performance Shares offered to the Vendors (or their nominee/s) 112,500,000
Convertible Note Share Offer
Shares offered to the PML Noteholders (or their nominee/s) 30,000,000
Option Offer
New Options offered to the Advisers, the Underwriter, and other parties who participate in the Shortfall from the Priority Offer, and the Post Completion Directors (or their nominee/s) 59,000,000
Amount to be raised (before costs) $5,900
General
Total cash on completion of the Offers (after costs of the Offers) $4,430,000
Total shares on issue on completion of the Offers 212,898,200

Indicative Timetable

Closing Date for the Priority Offer 3 October 2018
Closing Date for the Offers (other than the Priority Offer) 17 October 2018
Completion of the Acquisition 31 October 2018
Issue of Securities under the Offers 1 November 2018
Dispatch of holding statements 6 November 2018
Expected date for Shares to be reinstated to trading on ASX 14 November 2018

The Iron Ridge Project

The Iron Ridge Project consists of the Tenement located near Cue in Western Australia.

The Tenement has an existing ministerial approval to work and mine for iron ore and has historically been mined for red iron oxide ochre (pigment).

The Iron Ridge Project comprises two areas of mapped hematite mineralisation hosted within a banded iron formation (BIF) which contains a high grade (64.1% Fe) Inferred Mineral Resource estimate of 5Mt with low to acceptable deleterious elements at a cut-off grade of 50% Fe.

CSA Global reported the Mineral Resource in accordance with the JORC Code (2012) in April 2018.

Iron Ridge Mineral Resource:

Prospect Category Tonnes (Mt) Fe% SiO2% Al2O3% P% LOI%
Iron Ridge Inferred 5.0 64.1 3.3 2.7 0.05 1.6

CSA Global completed an Exploration Target to quantify the upside exploration potential of the Project. The quantum of this Target is summarised in Table 4. The ranges of tonnes and ranges of grade described in Table 4 are in addition to the existing declared Inferred Mineral Resource of 5 Mt.

Iron Ridge Exploration Target:

BIF Unit Mineralisation Tonnage (Mt) Grade (% Fe)
Main BIF Hematite 0.6-7.1 64.1-65.3
Little BIF Goethite 0.1-5.5 58.0-59.5
Total 0.7-12.7* 58.0-65.3

* Totals may not sum correctly due to rounding

Note: An exploration target is a statement or estimate of the exploration potential of a mineral deposit in a defined geological setting where the statement or estimate, quoted as a range of tonnes and a range of grade (or quality), relates to mineralisation for which there has been insufficient exploration to estimate a Mineral Resource.

Iron Ridge Project - Proposed Exploration Programme

The Company proposes to use the funds raised pursuant to the Public Offer to undertake an exploration program aimed at increasing the Mineral Resource and improving its confidence in accordance with the JORC Code (2012).

This will commence with the testing of the maximum case as defined in the Exploration Target and selective infill drilling to improve the geological understanding of the mineralisation.

To progress and improve the classification confidence in the Mineral Resource, further drilling, including a Mineral Resource estimation is proposed for Year 2.

Year 1 Drill Program

The primary objective of the drilling is to test the maximum case of the Exploration Target and develop an understanding of the depth, lateral extents and stratigraphy of the hematite mineralisation, therefore addressing the key geological risks.

A total of a maximum 15 RCP holes (2,650 m) on five sections, with three holes per section are proposed, with hole depths varying from 80 m to 250 m.

Specific drill details and metres related to the proposed Year 2 use of funds will be developed pending results from the Year 1 work program. It is assumed for these reporting purposes that an additional 2,500 m of drilling will be required in Year 2.

Strategy post completion of the acquisition

Following completion of the Acquisition and re-compliance by the Company with Chapters 1 and 2 of the Listing Rules, the Company’s primary focus will be to develop the Iron Ridge Project into a producing iron ore mine through:

  • undertaking an exploration programme aimed at increasing the Mineral Resource and improving its confidence in accordance with the JORC Code;
  • metallurgical studies: targeting confirmation of mineralisation, physical properties and marketability;
  • hydrological evaluation;
  • a Feasibility Study;
  • development permitting and approvals;
  • site preparation and logistics agreements (transport, port and shipping contracts).

The Company will also seek out and evaluate potential acquisitions of additional mineral projects with a view to acquiring one or more development assets.

Iron Ridge Project - Logistics

Road Transport

The Iron Ridge Project is located approximately 490km by road from the Port of Geraldton. The Company is currently proposing to transport iron ore by road using triple road trains from the Iron Ridge Project to the Port of Geraldton.

Port

Geraldton Port is the closest deep-water sea port to the Iron Ridge Project. The port is well serviced and currently operates at an estimated 16mtpa rate against a 20mtpa capacity. The port has three berths that are considered suitable for the purposes of shipping iron ore.

Conditions of the Offer

The Public Offer is conditional upon the following events occurring:

  • the Company receiving the Minimum Subscription under the Public Offer (being $4,500,000);
  • Shareholders approving the Acquisition Resolutions at the General Meeting;
  • completion of the Acquisition; and
  • ASX approving the Company’s re-compliance with the admission requirements of Chapters 1 and 2 of the Listing Rules and the Company receiving conditional approval for re-quotation from ASX subject only to the usual terms and conditions on which such conditional approval is given by ASX.

If any of the Conditions of the Public Offer are not satisfied, then the Company will not proceed with the Public Offer and the Company will repay all Application Monies received. If the Company does not proceed with the Public Offer, none of the Vendor Offer, the Convertible Note Share Offer or the Option Offer will proceed.

This deal closed on September 26, 2018