Adelaide-based Flinders Mines is planning to raise more than $50 million through an institutional placement and a fully-underwritten rights issue to progress its Pilbara iron ore project.
Adelaide-based Flinders Mines is planning to raise more than $50 million through an institutional placement and a fully-underwritten rights issue to progress its Pilbara iron ore project.
Proceeds from the raising will be used to complete the pre-feasibility study for the development of Flinders' flagship Delta project and, depending on the results of this study, may also be put towards fast-tracking mining operations.
Flinders Mines chairman, Robert Kennedy said the capital raising initiative would ensure the company maintained a well funded and aggressive development momentum for the project in 2010.
"The emerging fundamentals for this project are clearly demonstrating the potential for a
long-life iron ore mine," Mr Kennedy said in a statement.
The raising will comprise an institutional placement to investors issuing 160 million fully paid ordinary shares at 14.5 cents per share to raise approximately $23.2 million and an underwritten 1-for-7 non-renounceable rights issue at 13 cents per share to raise an additional $29.6 million, which will be conducted following the placement.
Euroz is the lead manager and underwriter with Adelaide Equity Partners advising.
Flinders shares were off two cents, or 11.43 per cent, to 15.5 cents at AEST1459.
Full announcement below:
FLINDERS MINES' RAISING $53 MILLION TO RAPIDLY PROGRESS PILBARA IRON PROJECT
A capital raising of $52.8 million has been announced by Flinders Mines Limited (ASX: "FMS")
to fund a rapid progression to mining at its flagship Delta project and towards the completion of
a Bankable Feasibility Study (BFS) as a further development of its Pilbara iron ore project in
Western Australia.
Flinders Mines' Chairman, Mr Robert Kennedy, said today the capital raising initiative would
ensure the Company maintained a well funded and aggressive development momentum for the
project in 2010.
"The emerging fundamentals for this project are clearly demonstrating the potential for a
long-life iron ore mine," Mr Kennedy said.
The two tranche capital raising for the wholly-owned Flinders Mines Pilbara project will
comprise:
An institutional placement to sophisticated and professional investors issuing 160 million
fully paid ordinary shares at A$0.145 per share to raise approximately A$23.2 million
(subject to ratification at the Company's annual general meeting on November 6 of previous
share issues) and
A fully-underwritten 1-for-7 non-renounceable rights issue at A$0.13 per share to raise an
additional A$29.6 million (to be conducted following the placement).
If the Placement and Rights Issue are fully subscribed, Flinders Mines will issue approximately
387 million new ordinary shares, representing 27% of the Company's current issued capital.
The capital raising is being managed and the Rights Issue underwritten by Euroz Securities
Limited, with Adelaide Equity Partners Limited acting as advisers to Flinders Mines.
Proceeds will be applied to three objectives:
1. Completion of the pre-feasibility study for the development of the project;
2. Subject to the outcome of the pre-feasibility study, the potential application of funds
towards fast-tracking mining operations from the Delta deposit; and
3. The balance of the funds would be applied towards the completion of a bankable
feasibility study into the exploitation of its whole resource inventory and preliminary site
works for their development.
Flinders Mines' Pilbara iron ore interests are contained within two nearby tenements -
Blacksmith (E47/882) and Anvil (E47/1560). A scoping study completed in August identified
Delta, on the eastern flank of Blacksmith, as offering high grade opportunities and a low
stripping ratio for Flinders Mines' start-up Pilbara mining operations.
"The pre-feasibility study will define the preferred development options identified within Delta
that are likely to support mining operations," Mr Kennedy said.
"Significantly, our current drilling program for Bedded Iron Deposits has the potential to further add to our Pilbara total resource."
Flinders Mines has embarked in the current quarter on a major diamond and reverse circulation
drilling program across Delta with the intention of moving its current Inferred Resource in the
area to Probable Reserve status and to carry out metallurgical testing to define product
characteristics.
