Malachite Resources secures new funding for Conrad Silver Project

Malachite Resources (ASX: MAR) has advised that a new financing agreement has been reached with the company’s largest shareholder, Nanyang Mining Resources Investment Pty. Limited.

Under the new arrangements, Nanyang will provide $4 million in new funding by way of two convertible notes, one to the value of $1 million and the other to the value of $3 million, with the second of these being subject to the approval of Malachite’s shareholders.

The liabilities represented by the convertible notes can be settled, at Malachite’s election, either by the issue of new shares or by a mixture of cash and shares.

Nanyang has been given a first right to provide a further $6 million to Malachite when justified by future results or acquisition opportunities.

Drilling at Malachite’s flagship Conrad Silver Project will resume within a few weeks, following agreement on a $4 million funding package for the company.

Conrad Silver Project is located in northern New South Wales, about 25km south of the town of Inverell.

Malachite’s Managing Director, Garry Lowder said, “this is a strong vote of confidence in Malachite and its management by Nanyang."

"We looked long and hard at various joint venture structures for the Conrad Silver Project but in the end, the principals of Nanyang preferred to broaden their exposure to all of the company’s assets through a quasi-equity deal, which is priced well above the current share price."

"The new deal demonstrates the great strategic value of the Nanyang alliance to Malachite,” he added.

The new funds will be applied first to reactivation of drilling at Conrad, where the focus will be on the attractive silver-copper-tin mineralisation intersected towards the end of the last drilling program.

The results included: CMRD90: 1.5m @ 467g/t Ag, 1.06% Cu, 1.85% Pb, 0.19% Zn, 1.44% Sn and 30g/t In; and CMRD93: 1.02m @ 382g/t Ag, 1.76% Cu, 2.01% Pb, 0.15% Zn, 1.36% Sn and 23g/t In.

The new program will include infill holes to be drilled around these widely spaced earlier intersections. It will also test new targets along strike to the southeast, where recent surface mapping and sampling has indicated that this style of mineralisation is also developed.

http://www.proactiveinvestors.com.au/companies/news/6406/malachite-resources-secures-new-funding-for-conrad-silver-project-6406.html