Gindalbie to move on rights issue

GINDALBIE Metals will undertake a fully underwritten $9.5 million rights issue to aid exploration and development plans for its Blue Hills iron ore project in Western Australia. The funds raised will be used to pursue an active exploration program to support an early cash flow start-up project, as well as a feasibility study on a large-scale development of the Mt Karara magnetite deposit. The Blue Hills project, which includes the Mt Karara deposit, is located 45 kilometres east of Koolanooka in the state’s Mid West, 260km inland from Geraldton. The non-renounceable entitlements issue is to be made on a one-for-two basis at an issue price of nine cents and is to be underwritten by Patersons Securities. Gindalbie’s major shareholder, Melewar Steel Ventures, has committed to sub-underwrite $5 million of the raising. Melewar is a wholly-owned subsidiary of the listed Malaysian industrial conglomerate, Melewar Industrial Group Berhad, which is involved in the manufacture of steel tubing products. Gindalbie managing director David McSweeney said the raising would enable the company to fulfil its plans to build a significant new independent iron ore business in WA, with the Blue Hills project already attracting interest from major international steel groups.