CGN Resources IPO receives $10m to advance Webb project
Perth-based junior CGN Resources (ASX: CGR) has received $10 million from its initial public offering to advance a project it has held an interest in since 2007.
The Webb project, located in the highly-prospective West Arunta region of Western Australia, was originally conceived as a diamond play when CGN first opened its doors in a region that was virtually unexplored.
This changed in 2007 when the company entered into a joint venture with Meteoric Resources (ASX: MEI), and was the first company to negotiate a native title agreement with the Tjamu Tjamu traditional owners in 2013.
From this point onward CGN completed a series of high-quality exploration programs including aircore and reverse circulation drilling; surface loam sampling; detailed geochemistry, aeromagnetic and ground gravity surveys.
The work resulted in the discovery of what is considered to be Australia’s largest kimberlite field at Webb.
In 2021, CGN pivoted its exploration focus to the search for large magmatic mineral systems such as IOCG, magmatic nickel and carbonatites.
An airborne Falcon gravity survey was flown in 2022 to form part of a project-wide review of all available data to identify new targets.
The work was very productive and identified multiple high quality targets including – the Shep (nickel) and Hathi (rare earth elements) targets as well as the drill-ready IOCG (iron oxide copper gold) targets at Tantor, Surus, Snorky and Horton.
All targets sit within the Webb project where CGN holds an 86% interest in seven granted and one pending exploration licences across 948 square kilometres of tenure.
CGN’s offer was priced at $0.20 per share to raise a minimum $8 million (through the issue of 40 million shares) up to a maximum $10 million (or 50 million shares).
Oracle Capital and 708 Capital were exclusive joint lead managers to the offer and worked closely with the board to successfully achieve the maximum raise.
Net proceeds combined with available cash are planned to provide the company with sufficient working capital for at least two years after admission to the Australian Securities Exchange to complete disciplined and well targeted exploration.
CGN’s IPO closed last week after the company received applications exceeding the maximum subscription. The company is now poised to list on or around the 12th October 2023.
Post-ASX admission, the company said it would carry out a 1,200 metre diamond core drilling campaign to test the Tantor and Surus targets in advance of expanded and more detailed exploration in the new year.
Recent work by neighbouring companies WA1 Resources (ASX: WA1), Rio Tinto (ASX: RIO), IGO (ASX: IGO) and Encounter Resources (ASX: ENR) has resulted in significant discoveries of metalliferous carbonatites and IOCG style mineralisation demonstrating the potential of the West Arunta Orogen to host major magmatic deposits.
Back on the ground
CGN non-executive chair Darryl Harris said the company was keen to get back on the ground at Webb.
“We believe this is an exceptional asset with high prospectivity and multiple target types allowing us to deliver value for our shareholders,” he said.
“Over the next two years, our primary focus is to target the copper potential of an IOCG target and opportunistically target magmatic nickel sulphides, rare earth elements and diamondiferous kimberlites within the tenements comprising the Webb project.”
Mr Harris said CGN’s management team had firm plans for the IPO proceeds.
“We will deploy the capital wisely to deliver an optimum outcome for our shareholders,” he said.
“The high quality of our asset gives us great confidence that we have the potential to make a discovery of note over the coming years.”