Magmatic Resources shares rocket on Fortescue deal
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More news: Shares in ASX-listed minnow Magmatic Resources rocketed in early trading after announcing a 20% cornerstone investment by mining giant Fortescue.
Magmatic shares were trading 58% higher at $0.07 by 11:00am AEDT.
Fortescue makes cornerstone investment in Magmatic Resources
The news: Mining giant Fortescue will make a 20% cornerstone investment into ASX-listed mining explorer Magmatic Resources.
The numbers: Magmatic said the Fortescue will subscribe for 75,946,151 shares to hold a 19.9% stake in the company. The placement at a price of $0.049 per share will raise around $3.71 million and represents a 10% premium to Magmatic's 30-day volume-weighted average price at 31 January.
The deal was confirmed as the companies announced a farm-in and joint venture agreement, which will see Magmatic operate the copper-gold Myall Project for up to four years.
Fortescue will spend up to $14 million over six years to earn up to 75% joint venture interest in the NSW project.
The context: Magmatic said the Myall Project has many of the signatures of a Tier 1 copper-gold deposit, though the ASX minnow has recognised the need to partner with an industry major to further advance the project.
Meanwhile, the strategic investment by billionaire Andrew Forrest's Fortescue is expected to help Magmatic to further advance two other projects in parallel with Myall, including Wellington North.
What they said: Magmatic Resources executive chair David Richardson said: "We are excited to joint venture and partner with Fortescue to advance our exploration efforts across the Myall Project area".
"Fortescue's cornerstone investment in [Magmatic] will allow the company to simultaneously advance our other two projects at Wellington North and Parkes which are strategically located near Alkane Resources Boda-Kaiser deposits and Tomingley Gold Operations respectively," he said.
The source: ASX announcement
