OAR Resources Ltd has secured up to AU$1.75 million capital to accelerate exploration and development activities at its battery and critical minerals projects across its Australian portfolio.
The cash injection will be raised in two tranches of a 24-month convertible note with free attaching options to both new and existing groups of sophisticated and professional investors.
Critical minerals assets in WA and SA
The funds will be used to accelerate exploration and development activities at fully owned battery and critical mineral assets in Western Australia and South Australia.
The company believes the investment will provide adequate funding to enable it to execute its near-term goals.
The convertible notes will be issued to both new and existing groups of sophisticated and professional investors, in two tranches.
Tranche 1 will consist of $968,000 (968 Convertible Notes at $1,000 each) and is expected to be settled by May 5.
The balance of the funding comprising Tranche 2, $782,000 (782 Convertible Notes at $1,000 each) will be issued and paid upon receiving shareholder approval to be sought at a shareholder meeting proposed to be held in June 2023 (EGM).
The company is also proposing to issue investors with free attaching options, to be issued subject to shareholder approval at the EGM.
Multiple funding options assessed
The development comes after the company evaluated multiple funding options and concluded that the convertible note structure was most favourable to execute its near-term strategy of unlocking value from its wholly owned Oar Graphite Project in South Australia and Denchi Lithium Project in WA.
OAR completed the acquisition of the Denchi Lithium Project in November 2022 and earlier this year submitted applications for five additional prospective tenements to expand the project area to more than 1,000 square kilometres.
The decision to expand the project area followed field reconnaissance in December 2022 which identified several potential lithium bearing pegmatites outcropping within granites previously mapped by the Geological Survey of Western Australia.
Expansion opportunities
OAR is actively seeking opportunities to develop the Oar Graphite Project, located in the centre of the Eyre Peninsula.
The project contains a combined indicated and inferred mineral resource estimate (MRE) of 13.47 million tonnes @ 3.3% TGC, including 6.31 million tonnes @ 4.7% TGC.
The company is planning to conduct a new 5,000-metre aircore drilling program at the Oar Graphite Project to expand the existing MRE, which remains open along strike and at depth, and to provide fresh samples for the next stage of test work.
The company has already received Program for Environment Protection and Rehabilitation (PEPR) approval from the Department of Energy and Mining South Australia and has commenced landholder engagement in preparation for the planned drilling campaign.