DY6 Metals is poised to become the next rare earths explorer to list on the ASX after successfully raising $7m through its initial public offering priced at 20c per share.

The company, which holds the Machinga and Salambidwe REE projects as well as the Ngala PGE-copper-nickel project in Malawi, expects to start trading in the second week of June.

DY6’s fundraising efforts were kickstarted by Hong Kong-based Zhensi Group and Zhnung Nam New Material Company, which together contributed $2.5 million.

But the story resonated with other investors, ensuring DY6 comfortably raised the full amount it was seeking.

Machinga – the company’s flagship project – is just 40km east-southeast of Lindian Resources’ Kangankunde deposit (2.5Mt at 4.2% total rare earth oxide), with the major Lilongwe-Zomba highway running through.

While the Southern Malawi alkaline province is known best for hosting a range of light and heavy rare earth (HRE) projects, Machinga features a high ratio of heavy rare earths to the total rare earth oxide (TREO) content – with peak values of 39% – along with high ratios of dysprosium oxide with an average of 3.3%.

DY6 intends to use proceeds from the IPO to fund an initial ~5,000m reverse circulation and diamond drilling program following up on targets drilled by prior owner, Globe Metals and Mining (ASX:GBE), in 2011/2012.

Drilling will also follow up on trenching carried out in 2010 that returned results such as 7m at 1.26% TREO and 33m at 0.71% TREO to see how far mineralisation can be extended along strike.

The Machinga radiometric anomaly is continuous along a strike of 7km, indicating potential for further REE discoveries.

More arrows in the quiver

The company’s Salambidwe project is located on the Chilwa alkaline suite of southern Malawi, which also hosts Kangankunde, , Machinga and numerous other REE prospects.

It has seen limited exploration with rock chip sampling returning numerous >1% TREO results including 2.05% TREO including 214 parts per million dysprosium.

The company plans to carry out exploration activities such as radiometrics, mapping and soil and rock chip sampling which DY6 plans to work up progressively alongside Machinga.

DY6 also holds the Ngala PGE-copper-nickel which has been subject to no significant modern exploration.

However, Ngala is close to the Nacola rail/port corridor and grid power, which will allow it to benefit from access to supporting infrastructure with a pit to port solution for exporting products to global markets.

 

This article was developed in collaboration with DY6 Metals, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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