I hope you have all enjoyed the Easter break and are now looking forward to a drier Autumn than we have experienced on the East Coast of Australia so far this year.
Chala Metals has continued its diligent work in Peru through a difficult period of political upheaval, transport strikes and blockades caused by soaring fuel prices.
Despite these headwinds, we continued to make solid progress and are pleased to report the following progress.
- we are advised that the Peruvian High Court has now granted an injunction on the transfer of the 4 concessions titles under our Option agreement with Elfer Bravo. We will now seek compensation for damages, either through settlement or arbitration.
- We continue to seek opportunities to expand our concessions across the Achatayhua region, initiating negotiations for a Joint Venture on a 2300ha concession adjoining the Achatayhua project. This concession previously operated as a gold mine, with 5000 tonnes of tailings available at an estimated grade of 28 gms gold and value of US$12M, based on current gold prices. This project is called the Rihoco project.
- Our Chief Geologist has also identified open ground in the vicinity of AMP 1 to secure and explore. The area is prospective to contain Copper-Silver-Gold, like AMP 1.
- Initiated small scale mining operations at the Crucero JV. First processing is expected to be completed in May, with average grades of 4% Cu and 4 gms gold expected. Estimated average extraction rates of over 500 tonnes per month offers a potential monthly net contribution to CML of US$100,000, based on current commodity prices.
The sum result of the above is that the company is poised to improve its financial position dramatically over the next three months and be well placed to progress to the planned IPO, with the aim to raise $5-$8 Million at A$0.25/share.
We’ve deferred the annual General Meeting until mid-May to provide greater clarity on settlement negotiations and the progress of the small scale mining operations. Meeting details will be distributed to shareholders shortly.
Whilst we continue negotiations for possible share placements with mining companies, the opportunity to leverage small scale mining operations as a source of cash flow offers a viable alternative to finance our exploration activities at Achatayhua.
The Board has therefore decided to offer a non-renounceable rights issue, where existing shareholders are able to purchase additional shares in CML. All shares offered under the rights issue (“New Shares”) will be issued at a discounted A$0.08 cents per share on a one for one basis. All New Shares will be accompanied with an option to purchase an additional share at A$0.08 cents per share expiring in 12 months. The rights issue will be open from Tuesday, 26th April 2022 to Wednesday 11th May
I personally, as the major shareholder in the company, shall purchase A$200 k worth of new shares.
I have seen first hand the richness of the grades of Copper, Silver and Gold at Achatayhua and in the surrounding districts. CML can have a very strong positive future but does now require some additional capital, up to A$500,000 to pay for expenses of exploration and exploitation as per above until the Crucero operation is bedded down properly and the “Rihoco” gold recovery operation begins..
Your continued support for the company shall be much appreciated.
Executive Chairman and CEO