Brumby launches $2.5m cap raising

West Perth-based Brumby Resources Ltd has launched an underwritten 1-for-2 pro-rata non-renounceable entitlements issue, to raise a total of $2.57 million for exploration at its Pilbara iron ore projects.

The entitlements issue will be offered to existing shareholders on the basis of one new share for every two shares held at the record date at an issue price of 14 cents per share.

For every share issued there will be granted for no additional consideration one quoted option, exercisable at 15 cents each, with an expiry date of January 31, 2010.

Based on the company's current issued capital the entitlements issue will result in 18.3 million shares and options being issued.

Argonaut is the underwriter to the entitlements Issue.

Brumby managing director Geoff Jones said the funds raised would enable it to mount an aggressive exploration campaign on what it considered to be potentially 'company making' targets and it will move quickly to drill these targets once approvals have been granted.

Mr Jones said the company was gearing up for a busy exploration field season once statutory approvals had been granted, with priority to be given to drilling the two large-scale iron ore targets at Pardoo East.

These targets - which were identified from an interpretation of ground gravity and aeromagnetic surveys completed in 2007 - have the potential to host significant hematite iron mineralisation and are located close to the coast, excellent Pilbara infrastructure and several operating and historic hematite operations, he said.

Brumby also intends to undertake additional drilling at its Goldsworthy Project to follow up recent drilling results and
further test two identified ground magnetic and gravity anomalies which are also prospective for iron ore mineralisation.