THE BOURSE WHISPERER: South Australia-based iron ore play Iron Road Limited has written a big bank deposit slip having secured $11.5 million (before costs) in additional funds.
The company said the funds will enable it to continue the current definitive feasibility study (DFS) being conducted on its Central Eyre iron project (CEIP) and to option or purchase key land on the Eyre Peninsula of South Australia.
Central Eyre iron project location map. Source: Company announcement
Iron Road has raised the funds via a placement that will result in the issue of just under 21.03 million shares at a price of 55 cents.
“At every stage of developing the Central Eyre iron project we have consistently demonstrated its commercial viability with increasing confidence,” Iron Road managing director Andrew Stocks said in the company’s announcement to the Australian Securities Exchange.
“These funds will allow us to continue the journey to development and take the project to the next stage.
“Securing land for the associated infrastructure is a significant strategic step for the company.
“By commencing this action we have responsibility and control of the delivery of key assets, as we build South Australia’s largest iron ore project.”
The company said the current DFS on the Central Eyre iron project will assess opportunities for expanded production over the 12.4 million tonnes per annum level delineated in its Pre-Feasibility Study, following the delineation of significant additional Mineral Resources.
The raising strongly supported by long term Iron Road institutional investors including specialist resources investor The Sentient Group and endowment funds associated with Columbia and Duke Universities.
The Sentient Group will subscribe to the placement in two tranches (T1=4.9M shares, T2=5.2M shares), the second tranche being on or about the 16 May 2012.
The share placement will result in The Sentient Group and Columbia University increasing their holdings in the company to 34.3 per cent and 7.2 per cent respectively.
“I very much look forward to delivering the Definitive Feasibility Study,” Stocks continued.
“The funds secured today, from a diverse range of leading global institutions, are testament to the growing confidence in the project.
“Our economics and development rationale are now well understood and is up to us to deliver on that underlying promise.”