Flinders to raise $6.7m

Shares in Adelaide-based Flinders Mines plummeted on the stock market today after it announced a $6.7 million capital raising to complete a feasibility study on its Pilbara iron ore project.

The aspiring iron ore miner said a placement of about 313.3 million shares at 1.5 cents per share would be made to sophisticated and professional investors to raise about $4.7 million, however $4.5 million of that has already been committed by New Zealand-based Todd Corporation.

“Flinders has agreed that Todd Corporation, whilst they maintain a shareholding of at least 19 per cent, shall have the right, subject to consultation, to nominate and have appointed a person to the board of directors of Flinders,” the company said in a statement.

The share purchase plan meanwhile, is being made to eligible shareholders, who can each acquire up to a maximum of $15,000 worth of shares at the same issue price of 1.5 cents per share.

Flinders said the funds raised from the placement and share purchase plan would be used to complete a bankable feasibility study for its Pilbara iron ore project, and then make a final investment decision.

“Flinders has completed an extensive infill drilling program on the PIOP over the past six months and is currently finalising a new global resource estimate for the project,” it said.

“Once this has been completed, mine planning, plant design and feasibility studies will be completed for the resource.”

Shares in Flinders were 18.75 per cent lower at 1.3 cents per share at the close of trade.