Special Report: Cohiba Minerals is set to add $2.58 million to its coffers through a strongly backed capital raising as the highly anticipated drilling program on its tenements in South Australia’s Gawler Craton gets underway.
Cohiba (ASX: CHK) announced on Thursday it had received binding commitments to raise $2.29 million through a share placement to professional and sophisticated investors, while the company’s directors had agreed to tip in for another $290,000 of shares.
The placement has been priced at 1.6c a share, Cohiba’s last traded price before entering a trading halt before market open on Monday, with participants receiving one free-attaching listed CHKOA option for every two shares applied for.
Such was the demand from both new and existing shareholders that the company was able to place the shares direct without having to pay any commission to brokers.
“We are very pleased with the strong level of support for this capital raising, which provides further evidence of the positive sentiment behind our current exploration strategy,” Cohiba chief executive Andrew Graham said.
The funds from the raising ensure the company is well-funded to execute the exploration program planned for its Olympic Domain project, situated between two of SA’s biggest and best copper-gold mines, BHP’s Olympic Dam and OZ Minerals’ Carrapateena.
High hopes for Horse Well
Cohiba said on Thursday that drilling of the first deep hole had begun at the Horse Well prospect, which borders BHP’s Oak Dam West project.
In 2017 BHP reported a staggering intercept of 425.7m at 3.04% copper, 0.59 g/t gold, 346ppm uranium and 6.03 g/t silver from Oak Dam West, sparking a share price run for explorers with ground in the area, including Cohiba.
Horse Well’s proximity to Oak Dam West has been one reason for optimism as the drilling program begins, but geophysical analysis of the prospect also indicates the presence of a major feeder system believed to be associated with iron oxide copper-gold (IOCG) mineralisation that is comparable in size to the Olympic Dam feeder system.
The first hole drilled at Horse Well will be reverse circulation (RC) for the first 400-450m before changing over to diamond drilling to reach an estimated depth of 1,200-1,300m.
Results from this hole will inform the order of additional holes to be drilled at the prospect before Cohiba shifts its attention to the Pernatty C prospect to the south, which represents “a compelling target for shallow, sedimentary hosted copper”, according to the company.
Pernatty C is located 10km west of the Mt Gunson copper-cobalt-silver mine, which produced 150,000 tonnes of copper and 2.1 million ounces of silver at an average copper grade of 2.44%.
In preparing for the Olympic Domain drilling to begin, Cohiba engaged consultancy Euro Exploration Services, widely regarded for its expertise in IOCG systems.
Euro played a critical role in the discovery of Carrapateena by prospector Rudy Gomez in 2005.
Cohiba owns a 51% interest in the Olympic Domain tenements and can increase that to 80% by meeting a particular expenditure milestone before March next year.
This story was developed in collaboration with Cohiba Minerals, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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Barry Stroman was a reporter for Zerg Watch, before becoming the lead editor. Barry has previously worked for Wired, MacWorld, PCWorld, and VentureBeat covering countless stories concerning all things related to tech and science. Barry studied at NYU.