Chinese fly in with $26m chequebook for Pluton

Hong Kong based General Nice Resources will underwrite the Pluton Resources rights issue to the tune of $26m and will take up their own rights worth $13.5m

Pluton are seeking to raise a minimum of $47.5m in a 1c rights issue to pay down all creditors, take out a discounted off-take agreement and become essentially debt free. The company has already reached the minimum subscription amount.

With grades north of 69% Fe the Cockatoo Island iron ore mine boasts potentially the highest grades in the world and with the port located directly alongside the mine, Pluton Resources is in an envious logistical position with iron ore prices hitting new lows.

GNR are a privately owned investment vehicle backed by two Chinese businessmen.

Last year the company turned over $20b and imported 48 million ton of iron ore and coal into China adding to their $8b worth of assets.

The company owns three iron ore mines, one coal mine, two coking plants, one port and has another two mines under construction in China.

In Australia it has also invested in non-mining assets such as horse studs, wineries and commercial properties.

GNR CEO Jaffe Lau who was in WA recently for a visit to Cockatoo Island said he thought the iron ore price would bounce at around $83 a ton and could trade as high as $120 a ton in the medium term.

He said he was confident about the future of Pluton Resources given its very high grades and relatively low cost to produce.