Perth-based Nemex Resources has become the latest small-cap miner to jump headfirst into the tech sector, yesterday announcing a $1.8 million deal to gain a majority stake in an eye-scanning security company.
The deal, subject to shareholder approval, would see the iron ore hopeful take a 51 per stake in Sydney-based Wavefront Biometric Technologies (WBT), which has patented a hand-held corneal eye-scanning technology to use in a similar way to individual PIN numbers.
Nemex said it had "firm commitments" for a $1.8 million capital raising to fund the development of the WBT technology, which is expected to take eight months to develop.
The news sparked a surge in Nemex's share price yesterday, which jumped from 1.5ï¿½ a share to 5.6ï¿½.
Despite the increase, Nemex, which has been gasping for oxygen in the suffocated small-cap mining space, is still valued at less than $1 million and is estimated to have less than $100,000 in the bank.
The proposal is part of an ongoing trend of cash-starved small-cap miners using their ASX shells to list tech-focused companies.
Nemex chairman Patrick Flint said yesterday it was a way to raise money and "diversify" the asset base.
"In the current market it's been very difficult to raise funds, so over the last few months we've been looking at other options to help with fundraising," Mr Flint said. "We've met a lot of people promoting different projects and this one stood out."
The company said it would keep its mineral projects, namely its flagship Téliméle iron ore project in Guinea, West Africa.
A shareholder meeting will be held in May with due diligence on WBT carried out over the next 60 days.