News: India Resources attracts Resources Capital Fund as major investor

India Resources (ASX:IRL) has signed a Placement Agreement with Resource Capital Fund VI for the issue of up to 200 million shares at $0.008 to raise up to $1.6 million.

Funds raised are to be used to pursue the Mining Lease for the Aravalli zinc-lead project in India and for general working capital.

The Aravalli project is potentially a world class zinc-lead deposit, located inside a globally significant zinc-lead province.

The agreement is conditional upon IRL also entering into a binding term sheet with Noble Resources International Australia for the issue of 90 million shares at $0.008 per share to extinguish the loan payable to Noble of $0.72 million.  

RCF pioneered the concept of mining-focused private equity funds and has supported 123 mining companies involving projects in 42 countries and 29 commodities.  

Resource Capital Fund VI is the sixth of the Funds and is currently being invested with committed capital of $2.04 billion.

IRL's Aravalli project lies in close proximity to zinc major Hindustan Zinc.  

The company has an exploration target of 95 to 135 million tonnes grading 2.2% to 4.5% zinc, and 0.7% to 1.8% lead.

IRL also controls the well established, profitable and expanding Surda copper mine and Mosaboni Concentrator plant, which has been in production since Nov 2007.

Notably, IRL is the only foreign mine operator in India in the underground base metals space to our knowledge.  

Zinc and lead prices are forecast to be strong due to ongoing reduction in mine output, and there is a dearth of new world class projects to replace shortfall.

This is a good result for IRL which was cash flow positive from its copper mine for the June quarter and for the year to June 30.