Iron Road has shrugged off uncertainty in the iron ore sector, going ahead with plans to raise $50.7 million to complete a feasibility study at its Central Eyre iron ore development in South Australia.
The company said today it would launch a fully-underwritten one-for-one rights issue to existing shareholders, priced at 18 cents per share.
The offer will be underwritten by Iron Road major shareholders, private equity investment groups Sentient Global Resources Fund III and Sentient Global Resources Fund IV.
Managing director Andrew Stocks said the funding would allow Iron Road to pursue strategic acquisitions to support the Central Eyre operation.
A smaller portion of the funds will also be applied to determine the potential for short-term production at Iron Road’s smaller-scale Gawler iron project, also in South Australia.
“We expect the DFS to will demonstrate the economics of our project and provide the foundation we need to complete financing and partnership discussions for what would be the country’s largest magnetite project, targeting 20 million tonnes per annum of high grade concentrate,” Mr Stocks said in a statement.
“We recognise that this is a major capital raising, particularly when considering the backdrop of recent poor market sentiment towards the iron ore sector, even for those in production.
“However, we have no doubt that hibernating our company until better market conditions arise is the wrong thing to do.
“This close to the finish line is not the right time to halt progress and set our projects back by months or even years.”
At 11:30AM, WST, Iron Road shares were down nearly 14 per cent, at 15.5 cents.
