- Chase Mining (CML) is set to acquire a major interest in the third-largest ASX-listed graphite project in Australia through an agreement with Hexagon Energy Materials (HXG)
- CML will buy Green Critical Minerals (GCM), which has the right to acquire up to 80 per cent of the WA-based McIntosh project
- To fund this and develop the project, Chase is launching a $3 million capital raise and, subject to shareholder approval, plans to change its name to Green Critical Minerals
- Chase says this acquisition is “transformational” and provides a unique opportunity to advance a critical minerals project and meet the demand for high-value graphite products
- Company shares are up 42.9 per cent on the back of this news to trade at 2 cents at 11:54 am AEST
Chase Mining (CML) is set to acquire a major interest in the third-largest ASX-listed graphite project in Australia.
The company signed a binding agreement with Hexagon Energy Materials (HXG) to buy Green Critical Minerals (GCM), which has the right to purchase up to 80 per cent of the graphite rights for the McIntosh graphite project in Western Australia.
Located in Halls Creek, the McIntosh graphite project is considered one of the most advanced and largest graphite resources in Australia.
It has a mineral resource estimate (MRE) of 23.8 million tonnes at 4.5 per cent total graphitic carbon (TGC) for 1.06 million tonnes of contained graphite spread across four deposits. Eighty one per cent of the MRE is classified in the Indicated category.
The McIntosh project reportedly contains a “very impressive, globally significant” flake size endowment with over 85 per cent of the Emperor deposit being greater than 180 Microns.
Notably, the unique properties of the McIntosh flake makes it suitable for high value graphite products including lithium-ion batteries, graphite foils, energy products, semiconductors, industrial diamonds, aerospace, and defence applications.
Chase’s independent directors, Leon Pretorius and Julian Atkinson, said the acquisition is “transformational”.
“The McIntosh project has more than 40,000 metres of graphite-focused drilling conducted on the property and extensive metallurgical test work providing a unique opportunity to advance a critical minerals project to development at a pivotal time where sovereign supply of graphite located in a tier-one mining jurisdiction is limited,” they said.
Transaction terms and outlook
Chase Mining will acquire GCM for 460 million shares, 100 million options and 459 million performance rights.
In order to acquire 80 per cent of the McIntosh project, GCM will pay $300,000 upon commencing the earn-in and a further $200,000 will be paid within 12 months.
Then it will need to spend up to $3 million (over three payments) on exploration to earn up to 80 per cent.
HXG is free carried until a decision to mine, which must be made within two years of the company earning 80 per cent.
Subject to shareholder approval, Chase Mining is looking to raise $3 million through a placement to progress the McIntosh project and satisfy the funding conditions for the acquisition of GCM. Sophisticated and professional investors will be issued 200 million shares priced at 1.5 cents each.
Chase Mining will also seek shareholder approval to change its name to Green Critical Minerals (GCM) after the acquisition to reflect its focus on graphite.
Looking ahead, assuming shareholders approve the acquisition, the company intends to “aggressively advance” the McIntosh project with drilling, studies, testwork and assessing market and downstream opportunities.
Company shares were up 42.9 per cent on the back of this news to trade at 2 cents at 11:54 am AEST.