Havilah Resources to close share purchase plan tomorrow as it eyes further upside in metal prices

Havilah Resources Ltd (ASX:HAV) will close its share purchase plan (SPP) to raise $2 million from eligible shareholders at 17 cents per share tomorrow (December 4). Capital raising proceeds will ensure Havilah remains adequately capitalised through 2021 to carry out planned value-adding work programs on its 100%-owned multi-commodity project portfolio in north-eastern South Australia near Broken Hill. The board has encouraged eligible shareholders to avail themselves of the opportunity to participate in the SPP, in order to assist the company to implement work programs that will help it to realise the full potential value of its projects. West Kalkaroo feasibility study priority Havilah’s Adelaide-based technical personnel with the assistance of several expert consultants are continuing to work diligently on the West Kalkaroo gold starter open pit approvals and economic models as Havilah’s first and highest priority. Mincore Pty Ltd has delivered its processing plant design study with capex and opex estimates and the results have been incorporated into a preliminary financial model. It is anticipated that relevant documentation and the financial model should be substantially completed by month-end. Drilling at Croziers Copper-Tungsten-REE Prospect A short exploration drilling campaign will commence at the Croziers prospect later this week targeting copper, tungsten and REE (rare earth elements) mineralisation. Earlier drill holes discovered potentially economic grades of these minerals as replacement mineralisation in an upper hanging wall position. The current target is the regional stratabound prospective horizon which, if it exists at this location, would be expected to lie 100-150 metres below the mineralised hanging wall horizon. This drilling is being supported by an ADI (Accelerated Discovery Initiative) grant, a major objective of which is to obtain bulk drill samples to allow study of the mineralogical and metallurgical recovery parameters for REE at Croziers in a research collaboration with the University of South Australia. Anomalously high levels of REE were previously noted in assays from Croziers. Adjustment to long-term copper metal price The spot copper price has had a remarkable rise of over 50% since April 2020. This has resulted in an upward adjustment to the long-term consensus copper price to US$3.16/pound. The Kalkaroo project pre-feasibility study (PFS) results released almost 18 months ago showed an estimated pre-tax NPV7.5% of A$564 million and IRR of 26% at US$2.89/pound copper, US$1,200/ounce gold (A$:US$0.75). At the time it was noted that the Kalkaroo project net present value (NPV) was highly sensitive to copper and gold metal prices. This is evident via sensitivity analysis in a metal price vs NPV7.5% value matrix reproduced in Table 1 below from the RPM Global Asia Limited PFS financial model, which shows a revised pre-tax NPV7.5% for Kalkaroo of A$903 million using current long-term price forecasts for copper and gold. Table 1 “Favourable commodities cycle, especially for copper” Given the favourable momentum in the commodities market, the Havilah board “Continues to believe that in spite of the present world upheavals and economic uncertainty, we are likely heading into a favourable commodities cycle, especially for copper with its many uses and constrained production upside capacity. “Havilah continues to be ideally leveraged to benefit from this potential up-cycle with its large JORC Mineral Resources and its two advanced copper mineral projects, with substantial gold and cobalt resources, along with its large and highly prospective exploration acreage.”