THE BOURSE WHISPERER: Dart Mining (ASX: DTM) has tied up a cash injection of $10 million from US-based institutional investor RK Mine Finance (aka Red Kite).
“Dart Mining has worked closely with Red Kite through a detailed due diligence process which involved a site visit by Red Kite’s investment team and its appointed experts.
“The due diligence included a thorough review of the mining methodology, plant design, geological model, environmental impacts and the financial assumptions underpinning the Unicorn scoping study,” Dart Mining managing director Lindsay Ward said in the company’s announcement to the Australian Securities Exchange.
Red Kite has agreed to purchase up to a 3 per cent Net Smelter Royalty in Dart Mining’s Unicorn project for cash of $8.5 million and to inject new equity of up to $1.5 million.
Red Kite’s investment into the Unicorn project and Dart Mining will be made in two tranches.
The first tranche will involve the purchase of a 2 per cent Unicorn project royalty for $4.5 million and the subscription of $0.8 million for new Dart shares at a 10 per cent premium to 20 day VWAP.
The initial investment is subject to FIRB approval, which Dart Mining said it expected to receive in April.
Dart Mining said it anticipated the first tranche of Red Kite’s investment in the Unicorn project and the company will be received by 30 April 2013.
The second tranche of Red Kite’s investment involves, in practical effect, an option to purchase an additional 1 per cent Unicorn project royalty for $4 million and to subscribe $0.7 million for further Dart Mining shares.
The second tranche is subject to Red Kite being satisfied certain milestones at the Unicorn project have been met; e.g. demonstrated progress of pre-feasibility studies.
These conditions are expected to be met by 31 October 2014.
Dart said it was confident the conditions set by Red Kite for the second tranche can be met well in advance.
“Red Kite’s agreement to make a substantial investment in two tranches is a real vote of confidence in the Unicorn project,” Ward said.
“It will not only enable Dart Mining to accelerate the feasibility and approvals process, but it also sends a strong message to other potential Unicorn cornerstone investors and off-take partners that will be needed as Dart Mining moves forward with the project.”