THE BOURSE WHISPERER: The self-funding policy employed by emerging iron ore play IronClad Mining for development of its Wilcherry Hill iron ore project in South Australia has continued its successful run.
The company has announced a further capital raising for the project to the tune of $3 million following the placement of 3.5 million shares at 85 cents per share to a number of sophisticated Australian investors.
IronClad said it will combine the proceeds from the latest raising with funds it already has at hand, to pay a $5.8 million environmental bond to the South Australian Government.
Payment of the bond is part of the process required for IronClad to begin mining under its Program for Environmental Protection and Rehabilitation (PEPR), approved by the SA Government late last year.
The $2.975 million share placement follows a $6 million placement in January.
IronClad believes a further $11 million may be raised by the end of March, with options in the company – due to expire at that time – likely to be exercised by increasingly strong support from investors.
“Growing national and international investor interest in our company and our Joint Venture partner in the Wilcherry Hill project, Trafford Resources, is providing substantial support for the companies and their shareholders,” IronClad Mining non-executive chairman Ian Finch said in the company’s announcement to the Australian Securities Exchange.
Project location. Source: Company
The Wilcherry Hill iron ore project is an 80:20 JV between IronClad Mining and Trafford Resources.
The company said the project is on schedule to commence shipments of Direct Shipping Ore (DSO) for sale to international steel mills in the second quarter of the 2012 calendar year.
The company expects to export about one million tonnes in its first full year of production, increasing to two million tonnes in its second year.
“Since a number of the ‘early works’ capital costs have already been spent – including construction of our $5 million accommodation village at nearby Kimba – most of the requirements for Stage One of the project have now been achieved,” Finch said.
“Debt financing through Australian and international financial institutions is expected to be in place over the next few months.
“This will allow us to fast track the next stage of our project – the designing and construction of the gravity circuit.
“It will also allow us to commence feasibility studies on our massive Hercules project, in close proximity to Wilcherry Hill, which is the long term future of the company.”