Heron keeps foot in two camps with CVRD placement

West Perth-based Heron Resources Ltd will raise $17.2 million through the placement of 15 million shares to CVRD Inco Ltd, just days after raising the same amount in a two-tranche placement of the same number of shares to BHP Billiton.

The placement will once again make the Brazil-based Companhia Vale do Rio Doce the major shareholder in the company, giving it a 13.96 per cent stake in the firm.

The funds raised will be used for the same purpose, completion of trial mining and pre-feasibility studies at the company's Jump-up Dam project.

The move comes a week after CVRD-Inco Ltd announced it would proceed to step three of the Kalgoorlie Nickel Project, its joint venture with Heron.

The full text of a Heron announcement is pasted below

Heron Resources Limited (ASX: HRR) is pleased to announce that agreement has been reached for the placement of 15,000,000 shares at $1.15 per share to a subsidiary of CVRD Inco Limited (CVRD Inco) to raise $17,250,000 (Placement Shares). Upon completion of issue of the Placement Shares, CVRD Inco's shareholding in Heron will increase to 13.96%.

The proceeds of the placement will be used for completion of the current Jump-up Dam Trial Mining and Demonstration project, undertaking the Jump-up Dam definitive feasibility study, regional nickel sulphide and laterite exploration along with general working capital.

Heron's Managing Director, Mr Mathew Longworth, said "The continuing support of major shareholders is appreciated, providing funding to undertake the extensive study programs required to make decisions on the Jump-up Dam project and conducting regional exploration within Heron's significant landholding."