(MENAFN - ProactiveInvestors - Australia) Cape Alumina (ASX:CBX) is to raise close to 1.5 million in two separate placements that would help it fund development of its core bauxite projects in Queensland.
Cape has placed about 3.8 million shares with stockbroker RBS Morgans at 12 cents per share to raise 456,359.
Separately, it has also placed about 7.1 million shares at 14 cents a pop with Racle Resources to raise 1 million.
The company also sold its non-core Hey Point bauxite tenements and its Cape York mineral sands interests Racle Resources.
The transaction valued at about 3.4 million includes a cash payment of 1.5 million and a 2-3% royalty on all bauxite sold from Hey Point. Cape Alumina will retain the marketing rights and receive a fee.
The NPV for the Hey Point sale is estimated to be 3.4 million or about 0.90 per inferred Resource tonne of bauxite.
Once the share placement transaction is completed, Cape Alumina will have 4.8 million in cash, which will be used to fund growth.
Cape Alumina will now focus on its flagship Pisolite Hills mine, which has recently been declared as a "significant project for which environmental impact statement is required" by the Queensland government.
Cape has started technical and environmental studies for the project and will commence land owner and native title negotiations soon.
Construction of the project is set to start in 2014 with production scheduled for later that year.
The project is said to hold resource of about 134.6 million tonnes, potentially yielding upto 7 million tonnes per annum of dry-product bauxite over 15 years.
Cape Alumina holds about 1900 square kilometres of exploration tenements in the highly prospective Cape York bauxite province in Queensland. Cape Alumina's tenements are the largest holdings in the region outside Rio Tinto Alcan mining leases.