Cobra Resources PLC (LSE:COBR) has entered into an agreement with Andromeda Metals (ASX: ADN) to acquire the remaining 25% of the Wudinna Project enabling Cobra to wholly-own the Gold and Rare Earth asset, located in South Australia.
In tandem with this strategic deal, Cobra has also announced plans to raise £1 million to aid in the cash consideration and execution of the Company’s planned work program to advance the Boland ionic Rare Earth Element (REE) discovery.
Wholly-Owned Wudinna Project
The acquisition agreement with Andromeda consists of £260,050 in cash, the cash consideration, and issue of 52,010,000 new ordinary COBR shares at a price of 1 pence per share.
Cobra’s wholly owned subsidiary, Lady Alice Mines Pty Ltd will acquire all the exploration rights in the relevant tenements, currently held by Andromeda.
The Agreement enables Cobra to gain full control of the asset, whilst Andromeda still benefits through its new shareholdings in the Company.
The Project is progressing well, with Cobra providing an update on its dual resource capabilities in September, finalising changes to both its REE and Gold JORC Mineral Resource estimates (MRE), placing the Company in a ‘unique’ and ‘economically advantageous’ position.
Drill results at the Project has recorded total rare earth oxide grades reaching as high as 3,568 ppm, with Cobra reporting having identified 22 orogenic gold targets and a total gold resource of 5.8Mt at 1.5 g/t gold for 279,000 Oz JORC Mineral Resource Estimate.
A Placement to Raise Funds
In conjunction with the Wudinna Subdivision and Sale Agreement, Cobra has also announced plans to raise up to £990,000, before expenses, by way of a placing 99,130,000 new ordinary shares of 1 pence each.
The Company has announced more than half of the placement is coming from funds raised by the original vendors of the Wudinna Project, further demonstrating the support for the Project.
The original vendors, through the placement, have increased their combined ownership of Cobra from 26.99% to up to 29.99%. In total, the Former Lady Alice Unitholders have committed to invest £606,000, subject to the issue of the Consideration Shares to Andromeda.
Cobra Resources CEO Rupert Verco commented on the acquisition and placement.
“We are delighted to have concluded an agreement to acquire the remaining 25% of the Wudinna Gold and Rare Earth Project from Andromeda,” he said.
“Andromeda will retain an ongoing interest by way of a shareholding in Cobra while enabling them to focus on bringing their Great White Kaolin mine into production. Cobra can progress the project, which includes Australia’s only ionic rare earth discovery with in situ recovery potential, as the sole owner and dominant holder of palaeo-channel ground in the region.”
“We are pleased with the strong commitment demonstrated by the original Wudinna vendors effectively underwriting a majority of the Placing. They recognise the opportunity the market is yet to appreciate that is presented by a confirmed, scalable ionic rare earth occurrence which lends itself to a low cost, low impact mining method, on a project underpinned by a dual and complementary gold and rare earth resource.”
“We look forward to advancing our ionic rare earth discovery through in situ recovery concept advancement, demonstrating scale, building on outstanding metallurgy, and advancing our commercial strategy.”
COBR’s London Stock Exchange-listed share price has risen 13.89% and is currently trading at 1.03 pence (10.30am UTC+ 8 hours).