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Colt Resources (COLT.CNQ) - arranging private placement; recent developments support our base-case and optimistic valuations
Comment by Objective Capital , Jul 21, 2008
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Colt Resources is arranging for the private placement of twenty million units, priced at C$0.25 each. The non-brokered private placement could provide the company with gross proceeds of up to C$5.0m to cover exploration expenses in Portugal and general working capital.
Each unit consists of a common share and a share purchase warrant, exercisable at C$0.30 over the following three years from closing of the offering. If the placement is fully subscribed and the warrants are fully exercised, they would provide Colt with an additional C$6.0m in cash.
The company is continuing its drill programme on the Penedono concession in northern Portugal. Colt is targeting the No. 11 and No. 13 veins, which are part of the multi-vein Santo Antonio mineralised system. The company expects its first assays by mid-August. Regional fieldwork is also under way on the property.
Colt is concurrently assessing data from the nearby Armamar-Meda project. The company is examining information and historical results concerning three areas of tungsten mineralisation identified on the concession. Regional fieldwork is also in progress on the property.
Objective's view:
Colt Resources could significantly expand its exploration plans at Penedono and Armamar-Meda, should it successfully complete its planned private placement. We believe the recent developments continue to support our base-case and optimistic valuations for the company and its key projects.
