Future Metals (ASX: FME) has agreed to a strategic infrastructure contract and cornerstone investment from Zeta Resources that will see Zeta acquire a 9.99% equity interest in the company.
The infrastructure agreement will allow Future the right to assess the potential use of the mothballed Savannah plant in Western Australia’s East Kimberley region to process ore from the nearby Eileen Bore copper-nickel-platinum group elements (PGM) and Panton PGM deposits, providing an acceleration catalyst for their development.
Zeta is the sole shareholder of Panoramic Resources, which owns the Savannah mine and plant, located in close proximity to Eileen Bore and Panton.
The assessment will involve a feasibility analysis based on technical, economic and regulatory information.
If the findings are positive, the companies will negotiate a commercial structure for operations involving a combination of Future’s ores and the Savannah plant.
The plant has a capacity of 1 million tonnes per annum and comprises a standard sulphide flowsheet including a primary crusher and cyclone and flotation circuits, a tailings storage facility and a campsite.
The facility, which is currently on care and maintenance, represents a significant opportunity for strategic partnerships with companies keen to enhance their shareholder value.
Zeta’s strategic investment in Future will be through the placement of 71.8 million ordinary Future shares priced at $0.011 each.
This forms part of the placement of 143.7 million shares Future has already received commitments for at the same price to raise a total of $1.58 million.
The issue price represents an 8.3% discount to the last closing price of $0.012 and a 6.8% discount to the 15-day volume-weighted average price of $0.0118.
Future will also launch a $2.64m pro rata non-renounceable entitlement offer (or rights issue) at the same price to eligible investors, based on one share for every three shares held.
The company will use funds raised from the placement and rights issue to advance the development of Eileen Bore, where it is targeting a bulk copper feed source for the Savannah plant.
CPS Capital will act as lead manager in both transactions.
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