Nickel and gold producer Independence Group NL is investing $2.5 million in Arrow Minerals to take an 11% slice of the company while acquiring 51% of the Plumbridge nickel project in Fraser Range region, Western Australia.
Independence will acquire 51% interest in the project for $1.5 million and will manage all exploration activities.
The company can increase its interest to 90% by spending $5 million over four years or can pay Arrow the same amount at an earlier date.
Independence has also subscribed for a $1 million placement in Arrow at 2.9¢ per share to take an 11% stake with one attaching listed option (AMDOA) for every two placement shares.
The investment of $2.5 million by IGO for a majority interest in the Plumridge Nickel Project and strategic equity stake in Arrow is a significant turning point for the Company,” Arrow’s Managing Director Steven Michael said.
Arrow has also raised $2.65 million via a heavily oversubscribed share placement on the same terms as the Independence investment.
“We are delighted with the overwhelming support we have received for our recent $2.65 million placement which introduced a number of high quality institutional and professional investors to our share register,” he said.
“IGO is a logical partner for Arrow, given its dominant position in the Fraser Range, including 100% ownership of the Nova Nickel Project. IGO’s Fraser Range exploration budget for FY2018 is $21 million, including significant airborne EM, ground EM and drilling programmes to be undertaken at Plumridge.
“Arrow now has sufficient funding to aggressively explore its Barlee Gold and Malinda Lithium Projects and has a supportive major shareholder with gold and nickel assets in Western Australia.”
Independence will immediately begin exploration, including airborne EM, ground EM and aircore drilling, following on from work already completed at the project.
Arrow is now fully funded to undertake accelerated exploration programmes at its wholly-owned Barlee gold and Malinda lithium projects this year.
Independence is the largest tenement holder and explorer in the Fraser Range, with 14,500 square kilometres of exploration licences under management.
Shares in Arrow gained 0.5c at 3.6c in Monday afternoon trading.