Iron, base and precious metals explorer Baobab Resources has raised US$6.3 million through the sale of 50 million ordinary shares to Redbird Investments. The investment company is a fully-owned vehicle of African Minerals Exploration & Development SICAR SCA and after the sale is approved, it will hold an 18.9% stake in Baobab.
The fund also has the option of a further 25 million shares which is exercisable up to July 2013, which would bring its total investment to almost US$11 million.
Baobab’s chairman Jeremy Dowler says, “We are very pleased to welcome the fund on board and look forward to working with them to build Baobab into a successful pig iron producer. The African Minerals Exploration & Development investment brings with it not just the assurance of full-funding beyond the conclusion of the PFS, but also an exceptional depth of experience in the mining finance space, specifically in Africa.”
The SICAR SCA fund was recently launched in Luxembourg and is actively investing in brownfield mineral projects, predominantly in Africa. Its founding partners David Twist and Rudolph de Bruin have a proven track record of bringing large-scale African projects into production.
Baobab says the funds will be used to complete the pre-feasibility study (PFS) on its flagship Tete iron ore project in Mozambique’s central north. The funds will also provide ongoing working capital for the company’s exploration programs.
Drilling at the Ruoni Flats project, where a 120-260 million tonne exploration target has been estimated, has continued to intersect a thick, heavily mineralized package.