Cazaly tops up coffers amid Equinox exit

Cazaly Resources (ASX:CAZ) has accepted a ‘compelling’ offer from Kobala Investments for the latter to purchase all 15 million of Cazaly’s shares in Equinox Resources (ASX:EQN). 

Under the agreement, both Kobala and Cazaly have agreed on a settlement date on or before 7 January 2024 for net proceeds of just over $2.15 million.

Cazaly, which has a $13.43 million market capitalisation, says it has undertaken its financial and other due diligence on Kobala and will retain its royalty on all future production from the Hamersley Iron Ore Project of US$0.30 per tonne. 

Sixty Two Capital will act as a broker to the transaction. 

The sale of Cazaly’s holding in Equinox comes amid an oversubscribed placement to raise $2.089 million. 

Cazaly reports just under 70 million fully paid ordinary shares will be issued at at an issue price of $0.03. 

Barclay Wells is lead manager and Canaccord Genuity (Australia) has been appointed co-lead manager for the placement. Barclay Wells is entitled to a 6% fee on gross proceeds received and the issue of 5 million unquoted options in Cazaly exercisable in 3 years at a price of $0.045.

Cazaly Resources Managing Director Tara French says both the placement and sale of the Equinox holding put Cazaly in a ‘very strong’ position to accelerate its work. 

Cazaly Resources Non-Executive Director Terry Gardiner represents an Executive Director of Barclay Wells and will be participating in the placement. However, the issue of any fully paid ordinary shares to Gardiner will require shareholder approval.    

The company confirms the funds, including those raised through the holding sale and existing cash reserves, will be used to advance its exploration activities at its lithium and rare earth element (REE) projects in Canada, Namibia, and Australia. 

In the meantime, Cazaly notes it will continue to explore other resource opportunities in leading mining jurisdictions. 

Cazaly Resources is a diversified mineral explorer and developer with a portfolio of mineral projects scattered across Australia, Namibia, and Canada considered prospective for rare earths, critical minerals, battery metals, and gold. 

As of 30 September 2023, the company had $2.825 million cash and cash equivalents at hand, according to its latest quarterly report.

Write to Adam Drought at Mining.com.au

Images: Cazaly Resources
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Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.