West Perth-based iron ore explorer Atlas Iron Ltd will raise $85 million through a placement, with funds raised going to development of the company's Pardoo Direct Shipping Iron Ore Project, including site capital and pre-payment for its port facilities.
West Perth-based iron ore explorer Atlas Iron Ltd will raise $85 million through a placement, with funds raised going to development of the company's Pardoo Direct Shipping Iron Ore Project, including site capital and pre-payment for its port facilities.
The full text of a company announcement is pasted below
The directors Atlas Iron Limited [ASX Code: AGO] ("Atlas" or "the Company") advise that the Company has resolved to raise up to approximately $85 million through the issue of up to 59.5 million ordinary shares at an issue price of $1.43 per share. Shares will be issued predominately to international and domestic institutional clients of Hartleys Limited, with strong participation from Atlas' existing largest shareholders.
Funds raised pursuant to the placement will allow Atlas to undertake the development of the Company's 100% owned Pardoo Direct Shipping Iron Ore Project, with a portion of the funds being applied towards site capital and pre-payment of port facilities. Funds raised will further be applied towards the pre-feasibility study of Atlas' 100% owned 853 Mt Pardoo Magnetite Project and ongoing exploration of the Company's various iron ore projects, where drill rigs are currently operating and will be for the remainder of this year and into 2008.
Atlas' Managing Director, David Flanagan stated "The overwhelming support for the placement by our major shareholders and a number of large international and domestic institutional investors, validates the confidence Atlas has in its Pilbara Direct Shipping and Magnetite Iron Ore projects. The placement was 100% oversubscribed and Atlas remains on track to be in production of Direct Shipping Iron Ore by September/October 2008, while at the same time progressing towards development of its world class 853 Mt Magnetite Iron Ore Project."
The placement in Atlas will be made in two tranches. The allotment of 18 million Tranche 1 shares, which is not subject to shareholder approval and falls within the Company's 15% placement capacity under ASX Listing Rule 7.1, will be issued with 10 days of this announcement. The allotment of 41.5 million Tranche 2 shares will be issued subject to shareholder approval at a meeting of shareholders scheduled for 6 September 2007.
Background Atlas Iron Limited
Atlas owns 100% of the iron ore rights to the Pardoo Project, located 75 kilometres from the Public access port of Port Hedland. The company is on target for the commencement of exporting iron ore by October 2008, shipping at a rate of 1 million tonnes per annum in its first year. Atlas is working to increase the underlying resource base sufficient to achieve a production rate of 3 million tonnes per annum by 2010. On 24 July 2007 Atlas announced an
853 million tonnes at 37.2% Fe inferred resource on its Pardoo Magnetite Project. Atlas is now moving to complete a Pre-feasibility Study on its Pardoo Magnetite Project by August 2008.
