Red Gum to list on Sth America portfolio

THE BOURSE WHISPERER: The Initial Public Offering (IPO) of fledgling South America-focused exploration play Red Gum Resources to raise a maximum of $6 million is expected to close on 21 November.

A listing for the company on the Australian Securities Exchange is hoped to occur during December.

The Offer is for a maximum of 30 million shares at an offer price of 20 cents per share.

An Oversubscription of up to a further 5 million shares, to raise a further $1 million, may be accepted.

Red Gum has full ownership, or the right to earn full ownership, in a prospective portfolio of base metal exploration projects, located in Chile and Peru.

In Chile the company has the option to acquire 100 per cent of the La Negra project, which hosts an exploration target of a 10 million tonnes to 70 million tonnes of polymetallic deposit containing zinc, lead, copper and silver.

Red Gum claims previous underground workings at the project to a depth of 30 metres indicate high grade resource potential up to 20 per cent contained metals.

There has already been geochemistry and 3D induced polarisation geophysical surveys completed, which have revealed large, coherent anomalies.

The company has engaged a drill rig for late November to undertake a 3,600 metre diamond drilling program.

In Peru Red Gum owns 100 per cent of the Chongos and Cerra Huancash zinc, lead and silver projects.

Chongos is located in the centre of the Peruvian polymetallic belt, which Red Gum pointed out contains world class deposits including Antamina, Iscaycruz, San Gregorio and Toromocho / Morococha.

Early stage exploration and geochemical sampling carried out at Chongos have already identified an anomaly 5 kilometres long demonstrating significant zinc anomalies up to 10 per cent.
 
“Our portfolio of projects is highly prospective for polymetallic discoveries and we look to immediately commence with a drill program at our flagship Chilean project, La Negra, post listing,” Red Gum managing director Dr paul Pearson said in a company announcement.

“Our Board’s unparalleled experience within the publicly listed resources space, combined with our on the ground knowledge of South America, will prove key in transforming Red Gum into a successful exploration and development company.”