Federation Acquisition Hinges on Due Diligence as Octava Raises $1.5M Capital

Strategic Capital Raise and Acquisition

Octava Minerals Ltd (ASX, OCT) has successfully raised approximately $1.5 million through a strongly supported placement aimed at advancing its exploration ambitions. The funds will primarily support the company’s planned due diligence and preliminary exploration activities on the Federation copper-zinc-silver project in Western Tasmania, a promising asset acquired through a binding conditional agreement to purchase 100% of Magnes25, the project’s registered holder.

The placement involves issuing around 50 million shares at 3 cents each, accompanied by unlisted options exercisable at 8 cents, reflecting a 25% discount to the recent closing price. This capital injection not only strengthens Octava’s balance sheet but also signals investor confidence in the company’s strategic pivot towards base metals with critical energy applications.

Federation Project, A Historical Opportunity Revisited

Located just 12 kilometers west of Zeehan, the Federation project covers approximately 121 square kilometers over two granted exploration licenses. The area is geologically notable for its position on the margin of the Heemskirk Granite dome, a multiphase intrusion known to host various mineralisation phases. Historical drilling conducted in the late 1970s by Renison Limited at the Sweeney’s Prospect uncovered significant mineral intersections, including a standout 23 meters grading 1.19% copper, 1.7% zinc, 121 grams per tonne silver, and 1.17% tin.

Despite these encouraging results, exploration was never pursued further due to a then prevailing focus on tin deposits. Octava’s acquisition and renewed exploration efforts aim to unlock the potential of what may be a larger remobilised volcanic massive sulphide (VMS) system, with mineralisation remaining open at depth and along strike. The project’s proximity to existing mining infrastructure and hydro power stations adds to its strategic appeal.

Funding Allocation and Future Plans

Beyond Federation, the placement proceeds will also support ongoing metallurgical testwork at Octava’s Byro rare earth elements (REE) project, conducted in collaboration with CSIRO. This diversified approach underscores Octava’s commitment to advancing multiple projects within its portfolio, balancing base metals and critical minerals exploration.

The acquisition agreement includes customary conditions precedent such as satisfactory due diligence, debt-free status confirmation, and regulatory approvals, including shareholder consent. Octava will issue shares to Federation vendors and grant a 1% net smelter royalty, aligning vendor interests with the project’s future success.

Governance and Incentives

In tandem with the acquisition, Octava proposes a performance rights package for its board, contingent on shareholder approval. This package is designed to incentivize management by linking rewards to share price milestones, reflecting confidence in the company’s growth trajectory.

CEO Bevan Wakelam highlighted the unique opportunity the Federation project presents, noting the strong historical grades and geological indicators that suggest a significant discovery potential. The company plans to commence drilling and exploration promptly, aiming to clarify the mineralisation’s extent and economic viability.