MC - $48m
SP - 30.5c
Shares - 161m
Options - Nil
Cash - $6.5m
FULLY UNDERWRITTEN $40M CAPITAL RAISING TO CONTINUE DEVELOPMENT OF EXPANDED CENTRAL EYRE IRON PROJECT
Iron Road announced a fully underwritten 31-for-40 accelerated non-renounceable entitlement offer of new Iron Road shares at an offer price of $0.32 per New Share to raise approximately $40 million. The Entitlement Offer comprises an institutional component and a retail component . The Entitlement Offer is fully underwritten by CIBC Australia Ltd.
Funds raised from the Entitlement Offer will be used to continue the significant progress made to date on the Definitive Feasibility Study (DFS) for the expanded Central Eyre Iron Project (CEIP), which is evaluating annual production of 20 million tonnes of premium iron product as well as initiating associated land acquisitions.
Iron Road will also devote funds from the Entitlement Offer to the completion of a scoping study for the smaller Gawler Iron Project, which may offer the opportunity for development of an initial revenue generating project, ahead of the CEIP.
Highlights
● The ongoing DFS work includes evaluation of an expanded production profile for CEIP which offers significant scope for operating cost reduction and reduced unit cost per installed tonne of export capacity.
● Gawler Iron Project offers potential for development on a shorter timeframe than required for CEIP.
● High calibre team now in place enables Iron Road to grow the company’s iron ore business.
● Entitlement Offer fully underwritten by CIBC Australia Ltd, a wholly owned subsidiary of Canadian Imperial Bank of Commerce, a major Canadian chartered financial institution.
● The Retail Entitlement Offer is fully sub-underwritten by major Iron Road shareholder, and private equity resources fund, the Sentient Group.
Central Eyre Iron Project
● Stage VII drilling programme at ‘Rob Roy’ completed, confirming strike continuity of the orebody to the east and the Stage VII Extension drilling programme commenced.
● Exploration target for Stage VII ‘Rob Roy’ drilling programme was increased from 400-700Mt to 700-900Mt magnetite gneiss with a grade of 16-18% iron estimated1.
● Definitive Feasibility Study (DFS) activities continued to advance engineering for the mine, process plant, tailings storage and major infrastructure facilities. Proposals for study services were received for utilities, support and ancillary facilities.
● 1,100m of PQ size core submitted for comminution and beneficiation tests along with quantitative mineralogical characterisation.
● Completion of 26 geotechnical boreholes and 32 trenches.
● Dynamic simulation of ore treatment and concentrate handling has advanced to select or confirm sizes of major equipment to deliver 20Mtpa of concentrate.
● Community engagement continued, including Focus Group meetings with community, business and District Council participants.
Gawler Iron Project
● Initial assay results from Stage II diamond drilling programme received. Core samples selected for petrological studies to define ore types, host rock mineralisation to facilitate final design of metallurgical studies.
Corporate
● Iron Road secured 90% of the iron rights at Gawler with final cash payment of $1.15M.
● Exploration Licence 4849 (Warramboo) was granted over former Exploration Licence 3699 for a further term of two years.