Orminex tops up cash and collars Wyllie as cornerstone investor

Orminex ASX ONX Comet Vale underground mining 2018
Orminex plans to start underground gold mining at Comet Vale by the end of 2018.

Junior gold explorer Orminex (ASX: ONX) was one of today’s biggest ASX gainers after it announced it had collared Wyllie Group as its cornerstone investor and completed a heavily oversubscribed A$7 million capital raising to fund exploration and development at its two Western Australian gold projects.

The newly formed mining investment company hit an intraday high of A$0.07 – a 22% increase on the previous day’s close of A$0.057 and a whopping 133% rise on the capital raising issue price of A$0.03 per share.

Orminex executive chairman Daryl Henthorn said he welcomed Wyllie’s participation and resultant 6% stake in Orminex.

Funds from the raising will be used to advance the company’s 51%-owned Comet Vale gold project, which has an approved mine plan and near-term production potential. Funds will also be used towards exploration at Golden Lode.

Formerly known as Mintails (ASX: MLI), Orminex relisted on the ASX late last month with its name changed to reflect its new focus and direction.

A board overhaul was also made with Mr Henthorn moving from non-executive chairman to an executive chairman role. Additionally, John Correia and Emmanuel Correia were appointed as non-executive directors, while Steve Formica and Stephen Brockhurst stepped down.

The changes were made as part of Orminex’s decision to secure a 51% interest in Comet Vale and acquire 100% of the Golden Lode gold project, following strategic mineral ventures alliance with contract mining company GBF Mining in late January.

According to Orminex, the alliance with GBF gives the duo the benefit of GBF’s mining equipment and expertise.

Orminex claims the duo will be able to develop projects that do not fit traditional development and finance models.

Comet Vale gold project

Comet Vale is about 100km from Kalgoorlie in Western Australia and has a JORC-compliant resource of 748,000 tonnes grading 8.5 grams per tonne gold for 203,100 contained gold ounces.

The project comprises 15 granted mining permits, one miscellaneous licence, an exploration permit and an approved underground mine plan.

Because of its alliance with GBF, Orminex has established a mine management agreement for the project.

First production from Comet Vale is scheduled for later this year.

Golden Lode

About 100km from Comet Vale, the Golden Lode gold project hosts a historic mine which produced 3,000oz gold with an average grade of 8g/t.

Previous drilling pulled out several high-grade intersections including 1m at 266g/t gold, 6m at 77.36g/t and 3m at 28.33g/t.

Orminex plans to prove up a resource that is suitable to an open pit operation.

By late afternoon trade, Orminex’s share price was at A$0.063 – up more than 10%.