Rum Jungle Resources Limited has re-extended its schedule for Central Australian Phosphate Limited’s off-market takeover.
The offer due to close on Friday September 20 will remain open for acceptance until 7.00pm Melbourne time, October 11, 2013 (unless extended).
80.25% of Central shares are already held by Rum Jungle which means scrip for scrip rollover relief may be available for part of the capital gain made by Central shareholders accepting the offer.
Rum Jungle Resources strongly encouraged Central Australian Phosphate shareholders last week to accept the offer as it will allow the shareholders to realise cash value for their investment and to share in the future upside of the combined company.
In an announcement released today, Rum Jungle and Central have agreed to enter into a services agreement to expedite exploration drilling on Central’s Arganara Phosphate tenement EL24726, with Rum Jungle providing a letter stating that it intends to provide financial accommodation up to a maximum of $1 million on certain terms and conditions.
The accommodation will be reduced by a corresponding amount to the extent that Rum Jungle participates in any pro rata rights issue proposed by Central to raise capital.
The companies are currently finalising their formal Loan Agreement for an initial loan of $100,000 on commercial arm’s length terms.
Once the takeover has been completed, Rum Jungle’s flagship asset will be the combined Barrow Creek 1 and Arganara resources. It will host a measured, indicated and inferred resource of 550 million tonnes at an average grade of around 15% at a cut off of 10% P2O5.
The resource is shallow, with low strip ratios and appears to be free digging, and is 90 kilometres from the Central Australian Railway. Of all undeveloped Georgina Basin phosphate deposits, it is the closest to existing rail infrastructure.
According to Proactive Investors Australia, there is down strike exploration upside potential for a 1 billion tonne resource.
Rum Jungle Resources Ltd is the only company in Australia with significant resources of both phosphate and potash.
It is a diversified and Australian Stock Exchange – listed junior explorer focused on highly prospective land located in Australia’s Northern Territory with a strategic intent to find, develop and operate fertiliser mineral, base metals and gold projects, located in close proximity to existing transport infrastructure.