RE: Alliance News28 Nov 2018 15:57
IN DEPTH: Herencia Resources Hunting For "World-Class" New Project
LONDON (Alliance News) - Herencia Resources is confident of the acquisition of a new "world class" project in South America, with an announcement potentially within the coming weeks.
Speaking to Alliance News at the Mines & Money conference in London this week, Chief Executive Carl Dumbrell said: "We are clearly saying we are looking for a new project. Now we are not doing that for negative reasons, the way we see it is we've got a great company here that is well backed by two really good shareholders.
"We can take it [Herencia] from a company with a handful of junior projects into a company possibly with a world-class project. We've started our search, and it's pretty much been South America, and copper and gold."
Herencia's current operations are exploration projects in Chile: Guamanga, La Serena, Pastizal, and Picachos.
Dumbrell said the company likes two of the current projects, Pastizal and Picachos, "an awful lot".
However, on Guamanga and La Serena, he commented: "The other two we like but I don't believe they are game changers.
"I just don't think it's the best deployment of our capital. Too much work, too early stage: I can't see the bang for buck."
Guamanga and La Serena are likely to be sold if Herencia can secure a new project elsewhere in South America.
Dumbrell continued: "We are South American, hunting for copper and gold. We like Chile, but we won't limit our search there.
"We see South America opening up more than ever, it's a friendly place to do business, so why would we not? There are still parts that are more difficult than others, but we are doing a search across the continent."
"We've come across a couple of good targets," he added, "and we're doing some due diligence specifically on one. We would hope to be public in a few weeks."
On the funding side of things, Herencia in September said it had enough cash until the end of October, but Dumbrell this week said the company is fine financially.
The company hopes to go to the market at some point, with management participating in any equity raise, but Dumbrell did say that macro-economic issues such as Brexit mean it is not the right time.
"The market here is pretty tight at the moment, so it is not the right time to do a deal," he said.
"I would like to do a deal, but when I do it will be a proper capital raise. We are talking to parties here but at the moment it is not just right, and sadly for us, it's Brexit."
Herencia is backed by two "friendly" major shareholders, Dumbrell noted: Lind Partners in New York and Oriental Darius in Hong Kong.
Lind is backed by the John Hancock, the son of Australian mining magnate Gina Rinehart, and Dumbrell described them as "true expert junior resource investors".
Oriental, he added, is backed by a "very wealthy" family in Hong Kong.
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