Indo Mines shares spiked on the ASX today after the explorer announced its cornerstone shareholder, Indonesia’s Rajawali Group, had agreed to kick in $50 million through a share placement.

Indo said Rajawali had agreed to take up 250 million shares, priced at 20 cents each, taking its stake in the Perth-based company to 57.12 per cent.

The company said the funds would be used to establish a 2 million tonne per annum iron concentrate facility, ongoing pig-iron studies and completion of financing due diligence for the Jogjakarta iron project in Indonesia.

“The significant injection of funds by a strong and well-respected Indonesian company demonstrates the support and commitment to achieving the company’s vision in establishing an Indonesian steel industry based upon the vast Indonesian iron sand resources,” Indo said in a statement.

“The board of Indo Mines is delighted by Rajawali’s increased participation in the company which will enhance the prospects for the company in taking the Jogjakarta iron project forward.”

At close of trade today, Indo Mines stock was up 18 per cent, trading at 13 cents.