BC Iron closes IPO oversubscribed

BC Iron Ltd, the iron ore asset spin-off from Alkane Exploration Ltd and Consolidated Minerals Ltd, has closed its $6 million IPO oversubscribed, ahead of its listing on December 15.

The full text of a company announcement is pasted below

Newly launched Australian iron ore company, BC Iron Limited, is set to make its debut on the Australian Stock Exchange around the 15th December 2006 after closing its $6 million IPO. The public share offer closed early and heavily oversubscribed on Friday 1 December, together with the scheduled closing of the priority offer to Alkane Exploration Ltd shareholders.

BC Iron's Managing Director, Mr Mike Young, said the investor response through both offers had been exceptional, with the offer strongly supported by a range of Australian institutions and high-net worth investors, together with a strong response under the priority offer to Alkane shareholders.

"The response from investors, including Alkane shareholders, has been outstanding, and I would like to take this opportunity on behalf of the Board to thank those who have supported us," Mr Young said.

"We are very pleased to have closed early and we look forward to listing on the ASX around the 15th of December," he added. "We already have preparations well advanced for our maiden drilling program, which will commence in March 2007."

BC Iron - which is headed by Mr Young (recently Exploration Manager for Cazaly Resources) as Managing Director, and well-known Perth-based lawyer and businessman, Mr Tony Kiernan, as Chairman - was formed earlier this year through the amalgamation of the significant iron ore assets of Alkane and Consolidated Minerals Limited in the Pilbara region of Western Australia.

The $6 million IPO will underpin aggressive drilling programs targeting potentially large-scale channel iron deposits within the recently consolidated Nullagine Iron Ore Project, comprising adjoining tenements held by Consolidated and Alkane in the East Pilbara region. This region currently one of the fastest growing iron ore provinces in the world, with major existing and new iron ore mines including Fortescue Metal Group's Christmas Creek and Cloud Break mines, currently under development.

BC Iron lodged a Prospectus with the Australian Securities and Investments Commission on 8 November for the issue of 24 million shares at 25 cents each to raise $6 million. Perth-based stockbroker DJ Carmichael Pty Ltd is sponsoring broker to the issue.

The IPO will ensure the immediate exploration of some 1,500 sqkm of tenements targeting three separate channel deposit systems, providing a significant opportunity to build a substantial new iron ore exploration and development project in one of the world's most valuable mineral provinces. A total of $3.25 million of expenditure has been budgeted for exploration during the first two years.

The CIDs of the Pilbara region, such as the world-class Yandicoogina deposit, account for 7.8 billion tonnes of iron ore resources, but historically have contributed approximately just 20 per cent of production from the region. Production from CIDs is increasing with the record levels of demand for iron ore globally and particularly from the rapidly growing Chinese economy.

Detailed assessment by Alkane determined that an Exploration Target of between 200 - 600 Mt of iron-rich pisolitic channel deposit exists in the Bonnie Creek system. This target was determined from detailed mapping and limited drilling during Alkane's diamond exploration in the 1990s. The drill holes were not assayed for iron, however surface sampling has returned values of up to 59 per cent Fe within the Bonnie Creek system.

The Nullagine Iron Ore Project area is 200km south east of Port Hedland and 75 km north of Newman, strategically located approximately 50-100km east of the existing BHP-Billiton railway line and 20-30km north of the proposed operations and infrastructure being developed by Fortescue at Christmas Creek and Cloud Break. The railway line proposed by FMG traverses the western edge of the Nullagine Project tenements.