Northern Iron progresses capital raising

Northern Iron has successfully completed the bookbuild for its institutional share placement offer to raise $69 million.

The West Perth-based company announced the offer on October 13

The offer was priced at $1.58 per share, a discount of 12.2 per cent from the previous closing price of $1.80.

The company expects it will gross $69.3 million upon settlement next Wednesday October 20.

Proceeds from the offer will be used to undertake modifications and enhancements to Northern Iron's Sydvaranger project and reduce the company's outstanding debt.

"The Company is very pleased to welcome new shareholders and acknowledges the invaluable support provided by its existing shareholders," said Northern Iron chairman David Griffiths.

"The funds raised will assist the Company in the implementation of key operational improvements while at the same time de-gearing the project," he said.

See company statement below:

Northern Iron Limited ("Northern Iron") is pleased to announce it has successfully completed the bookbuild for the institutional placement ("Institutional Offer") announced on Wednesday, 13 October. The Institutional Offer was priced at $1.58 per share, a discount of 12.2% from the previous closing price of $1.80 and will raise gross proceeds of $69.3 million upon settlement next Wednesday, 20 October. The Institutional Offer was well supported with very strong demand from both new and existing institutional investors.

Proceeds from the Institutional Offer will be used to undertake modifications and enhancements to Northern Iron's Sydvaranger Project, reduce outstanding debt and creditors and fund on-going working capital requirements and offer costs.

Commenting on the Offer, Northern Iron Chairman David Griffiths said: "The Company is very pleased to welcome new shareholders and acknowledges the invaluable support provided by its existing shareholders. The funds raised will assist the Company in the implementation of key operational improvements while at the same time de-gearing the project."

As indicated in our announcement on Wednesday, 13 October, the Company is also conducting a Share Purchase Plan ("SPP") which will allow eligible retail shareholders as at the record date to acquire up to $15,000 in new shares at the same price as the Institutional Offer of $1.58. Details of the SPP will be sent to shareholders shortly. As further advised by the Company in an announcement dated 14 October, OM Holdings Limited ("OM") will take up additional shares equating to 15% of the number issued under the SPP, pursuant to the terms of the subscription agreement between the Company and OM.

The trading halt, which has been in place since 9:30am Wednesday 13 October 2010, will be lifted prior to the commencement of trading on the ASX today (Friday 15 October 2010).