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Rafaella shares up 100% on agreed purchase of tin-tungsten project in Spain

Rafaella Resources Ltd.'s shares soared 100% in afternoon trading on the ASX as it agreed to purchase the Santa Comba tin-tungsten project in northwest Spain.

The company also plans to raise A$2.6 million via a share placement at 20 Australian cents per share, it said May 27.

Rafaella entered a conditional binding heads of agreement to acquire all the shares of private Spanish company Galicia Tin & Tungsten SL, which holds the mining licenses comprising the project.

The deal will be "transformative" for the company, which holds copper-cobalt and gold projects in Canada and Western Australia, Rafaella Executive Director Ashley Hood said.

Galicia is held 75% by a private Australian company Biscay Minerals Pty. Ltd., and 25% by a private Spanish entity Ulex Recursos SL.

Rafaella will issue 17.5 million common shares at 20 cents apiece to the vendors, who will earn a further 30 million shares when certain milestones would be achieved.

Following the acquisition, the ASX-listed miner will appoint Galicia representatives Steven Turner and Robert Wrixon to its board, with Turner taking over the managing director position.

Meanwhile, Chairman Graham Durtanovich will resign from the board and nonexecutive director Peter Hatfull will assume the position.

Galicia holds 15 granted mining licenses, valid until 2068, covering the 7-kilometer-long Santa Comba mineralized granite massif.

A historical estimate for the Mina Carmen underground mine at the project includes 738,200 tonnes at 0.81% tungsten trioxide and 0.18% tin.

Rafaella intends to develop the newly discovered near-surface mineralization, potentially as an open pit, and restart the Mina Carmen mine.