Oro Verde Limited (ASX: OVL) has announced a highly encouraging update on its Makuutu Rare Earth Elements (REE) project in Uganda, East Africa.
The company reported that it has closed its A$1.15million placement to sophisticated investors at A$0.08 per share and funds have been received by the Company.
OVL said that an expansion drilling program of up to 3,000m is underway at Makuutu Rare Earths Project.
The company said that the drilling program will target potential upgrade of current JORC Inferred resources to JORC Indicated status; increase the size of the current Mineral Resource; and obtain bulk samples for advanced-stage metallurgical testwork.
OVL said that the Maiden Mineral Resource Estimate for Makuutu is 47.3 Mt @ 910 ppm TREO, at a cut-off grade of 500 ppm TREO-Ce2O3. The mineral resource grade is at the upper end of the Exploration Target range.
The maiden Mineral Resource covers only a portion of the 26km-long Exploration Target, which remains at 270 – 530 million tonnes grading 400 – 1,000 ppm TREO
The Makuutu Rare Earth Elements project is located some 40 km east of the regional centre of Jinja and 120 km east of the capital city of Kampala in eastern Uganda. The project comprises three licences covering approximately 132 km2.
As of 10th March 2020, the Maiden Mineral Resource Estimate for Makuutu is 47.3 Mt @ 910 ppm TREO, at a cut-off grade of 500 ppm TREO-Ce2O3.
Oro Verde has entered into an earn-in agreement to acquire up to a 60% interest in the Makuutu Rare Earth project.
To date, the company has acquired an initial 20% interest in the Makuutu project with the next milestones being a 31% interest and then a 46% interest, based upon further expenditures.
The Company had defined an Exploration Target at the Makuutu Rare Earths project of 270 – 530 million tonnes grading 0.04 – 0.1 % TREO as of September 2019.
Mukuutu is significant in size and is understood to be potentially one of the largest ionic clay deposits outside of China, with grades consistent with these types of deposits.
Drilling at Makuutu
The company reported that it has now commenced an expansion drilling program of up to 3000m at Makuutu.
OVL said that the planned diamond core drilling program follows on from the core drilling program undertaken by the Company in Q4 2019.
Target of drilling program
The company announced that the diamond drilling will comprise of in-fill drilling, resource extensional drilling, exploration drilling, and collection of samples.
In-fill drilling: In-fill drilling within the area of maiden Mineral Resource (on tenement RL 1693) to assist in potential upgrading of resource to JORC Indicated status.
Resource extensional drilling: This is to expand the current Mineral Resource area further to the east (on tenement RL 1693).
Exploration drilling: Exploration drilling would be on adjacent tenements (EL 1766 to the east and on RL 0007 to the west).
Sample collection: Collecting variability samples and composite bulk samples for advanced-stage metallurgical testing and mineralogical evaluation.
Mineral Resource Estimate
The company had recently announced the Mineral Resource Estimate for the Makuutu Rare Earths Project. The MRE was prepared by independent specialist resource and mining consulting group, Cube Consulting Pty Ltd.
The Mineral Resource was compiled using a 500 ppm TREO minus Ce2O3 marginal cut-off grade. This cut-off was selected based on published information from more advanced projects with comparable mineralisation and conceptual processing method.
A summary of the Mineral Resource Estimate derived is as shown below.
Funding through placement and share purchase
The company had received commitments to raise $1.15 million by way of a share placement at $0.008. OVL said that it has now closed its A$1.15million placement to sophisticated investors at A$0.08 per share and funds have been received by the Company.
Under the Placement, a total of 143.75 million shares were issued at a price of $0.008. The shares issued under the Placement were issued utilising the Company’s existing placement capacity pursuant to Listing Rules 7.1A.
The Company said that it will also offer a share purchase plan (SPP) to raise up to $0.5 million from eligible shareholders at the same price as the Placement. Together, the Placement and the SPP is intended to raise up to approximately $1.65 million.
OVL said that the proceeds of the Placement and SPP will be used to fund the Company’s expenditure commitments at the Makuutu Rare Earth Elements project, for working capital, and to pay costs of the capital raising.
Oro Verde Executive Director Dr. Marc Steffens said: “Our work is generating outstanding results and with the results we expect from this ongoing advanced exploration, resource expansion, and project development activities, we look forward to demonstrating the potential we see for the Makuutu Rare Earths Project.”