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The iron ore explorer will issue around 291 million new shares at an offer price of A$0.18 ($0.17) each, Iron Road said on Thursday June 13.
The funding will be used to complete the definitive feasibility study (DFS) for the Central Eyre Iron project as well as enable the company to continue strategic acquisitions of property.
The Gawler Iron project will also receive a portion of the funds to establish the potential for shorter term production at 1-2 million tpy.
“We recognise that this is a major capital raising, particularly when considering the backdrop of recent poor market sentiment towards the iron ore sector, even for those in production,” md Andrew Stocks said.
“However, we have no doubt that hibernating our company until better market conditions arise is the wrong thing to do. This close to the finish line is not the right time to halt progress and set our projects back by months or even years,” he added.
The DFS is expected to be completed by the end of this year.
“We expect the DFS will demonstrate the economics of our project and provide the foundation we need to complete financing and partnership discussions for what would be the country’s largest magnetite project, targeting 20 million tpy of high grade concentrate,” Stocks said.
Last month, Iron Road said Central Eyre Iron project’s total resources topped 3.7 billion tonnes at a grade of 16% iron.
“A highly concentrated seaborne iron ore supply market coupled with anticipated demand growth from China and other developing markets is expected to continue to require new sources of supply. With recent testing in China confirming the product is well suited for Chinese steel mills, we are firmly aiming to become one of those new suppliers,” Stocks said.
Iron Road has raised A$50.7 million ($48 million) to push ahead with its Central Eyre Iron and Gawler Iron projects in South Australia.