INVESTORS touched by gold fever and with the nerve to back a new package of gold tenements have an option in Chameleon Mining NL.
The company recently issued a replacement prospectus after dealing with a number of concerns raised by the Australian Securities and Investment Commission regarding, among other things, how the money raised would be allocated.
The directors of Chameleon are hoping to raise $7.5 million, but may secure up to $11 million through the issue of 37.5 million, 20-cent shares. If fully subscribed the company will have a market capitalisation on listing of $14.4 million.
The offer of 52 per cent of the company was opened on January 30 and is scheduled to close by March 14, with listing expected on March 28.
The future fortunes of the company rest not only on the 11 tenements obtained in Fiji and the Kimberley in northern WA but also on the shoulders of chairman Nick Dondas, managing director Gregory Barnes, exploration director Suliana Niurou and company secretary Landan Roberts.
Strategically, the directors have committed 80 per cent of the money raised through the initial public offer to the Fiji projects, including target drilling adjoining the Emperor Gold Mine, where 6.5 million ounces of gold has been produced, as well as exploration on the Ndakunimba Structure, also in Fiji.
Potentially fuelling the exploration drive with a ready-made cash flow, besides the capital injection obtained through the IPO, is the start up of production scheduled soon after listing at the company’s joint venture at the Ruby Queen and Mt Dockrell leases.
The Ruby Queen leases cover five square kilometres. Reported drilling results of interest 14.2 metres at 22.77 grams per tonne gold and 9.3g/t gold. The Mt Dockrell project has an estimated target resource from previous exploration work of 1.5 million tonnes of eluvial gold bearing material and 3.5mt of alluvial gold bearing material. The Tarraji, Christmas Creek and Old Halls Creek projects are pegged in to provide additional cash flow to the company.
Yet despite the company’s optimistic assessment that the Kimberley will be up and running soon after listing, the prospectus has made no allowance or cost-outlay forecasts to potential investors.
Mr Barnes said the Kimberley was really still some way off production. Before that happens, he said, the company would have to carry out bulk testing to determine the grades on the projects.
Then it was a question of what methods would be used to process the resource, all of which meant there was no definite time line for the Kimberley.
But it is the projects in Fiji that are considered of greatest value to the company. The prospectus has placed a ‘most likely’ valuation of $5.8 million on the Fiji project compared with a ‘most likely’ valuation for its Kimberley workings of $2.9 million. Combined, the 20-cent shares are calculated to have a net asset backing of 18 cents a share.
The prominence of the Fiji tenements in the company’s balance sheet is also reflected on money geared toward the Pacific Ocean island project. If the full $7.5 million is raised, $5 million will be channelled directly toward exploration on Fiji island. Only $1.25 million is heading toward the Kimberley projects.
Already Chameleon, which has had only around a six-month shelf life according to Mr Barnes, is attracting keen interest from punters.
“I’m just staggered at the level of interest. I’m very surprised at how it has been even prior to the gold price rising strongly,” he said.
