Noble Mineral Resources raises A$30m for drilling at Bibiani Gold Project

Noble Mineral Resources raises A$30m for drilling at Bibiani Gold Project
Noble Mineral Resources (ASX: NMG) has received firm commitments for the placement of approximately 77 million shares at 39 cents to raise $30 million to fund an extensive drilling campaign that is expected to result in substantial increases in reserve and resource estimates at its Bibiani Gold Project in Ghana.

The capital raising will be competed in two tranches. Tranche one will comprise the issue of approximately 44m shares and tranche two, comprising approximately 33m shares, will be issued subject to shareholder approval at an EGM to be convened at a later date.

The placement was undertaken by BGF Equities and Patersons Securities as Joint Lead Managers and reported strong interest from domestic and Asian based institutions. The placement closed heavily oversubscribed.

The proceeds will be used to underpin an aggressive exploration campaign at Bibiani, which will see up to five rigs operating at the same time, drilling as many as 55,000m a month for the next 12 months.

Drilling is expected to result in significant increase to current Resource of 1.98moz and Reserve of 605,000oz. Plant refurbishment is well underway with 90% of the strip out complete.

Bibiani is on track for first production in mid-2011, rising to + 150,000oz a year.

The first phase of this drilling campaign will focus on the west wall of the main pit which was initially earmarked for a significant cut back.

However, recent data compilation and subsequent remodelling, coupled with recent drilling from underground which intersected substantial mineralisation to within 300m of the surface, indicates that a significant portion of this area is mineralised and remains open.

Noble believes the strong potential for this region to be reclassified as ore represents a highly significant point in the re-development of Bibiani.

Under this scenario, the company will re-optimise the pit design, review its mining schedule and reassess other operational requirements to ensure it takes full advantage of what would be a substantial boost to the project’s life and economics.

Part of the proceeds from the share placement will also be used to fund infill drilling around known satellite deposits at Bibiani to enable this mineralisation to be brought into the resource-reserve estimate.

Noble is fast emerging as a major West African gold producer that will have substantial production with robust margins and significant exploration upside.