Vital, Aragon team up on tungsten prospect

By: Esmarie Swanepoel

15th April 2009

JOHANNESBURG (miningweekly.com) – Tungsten explorer Vital Metals will team up with ASX-listed Aragon Resources to take advantage of opportunities in tungsten mining in North Queensland, the companies said on Wednesday.

The association would facilitate a medium- to long-term restructuring of activities, specifically to allow the Watershed scheelite project, in Queensland, to reach its full potential in the global tungsten market.

Aragon Resources would now become Vital’s major shareholder through a two part funding process, and would provide its cash requirements of up to $936 250 for the medium term.

Aragon Resources will subscribe for placement of 17,45-million shares in Vital, representing a 15% interest in the current issued capital, at 2,5 c a share, to raise $436 250.

The company would also subscribe to a convertible not for $500 000. The convertible not is unsecured, has a term of three years, and was not convertible within the first 12 months. The note also carried a coupon rate of 6% payable quarterly in arrears.

Vital stated that the note was convertible at the higher of 4 c a share, or 80% of the volume weighted average price for the month prior to conversion.

With Aragon Resources now holding a substantial share in the company Vital will appoint at least one director, nominated by Aragon Resources, to its board.

Aragon believed that the Watershed project held the potential to be developed as a long-term and significant producer of scheelite concentrate. Read more...