Northern Iron raises $17.5m in placement

West Perth-based Northern Iron has raised $17.5 million from an institutional placement with funds to go towards the expansion of the Sydvaranger iron mine in Norway.

In a statement today, the company said 17.5 million shares were issued at a price of $1 apiece, a discount to the last traded price of $1.10 at 13:12 AEDT.

The placement was managed by Macquarie Equity Capital Markets and Euroz Securities.

Sydvaranger is due to start production in July this year, with the company earlier this year signing an initial five-year offtake deal with a subsidiary of Tata Steel Group.

"Funds raised will be applied to accelerate the case for an incremental expansion of production, ordering the long lead items required for the refurbishment of the flotation circuit and for working capital," Northern said.

The company also plans to launch a share purchase plan for its Australian and New Zealand shareholders shortly.