Cyclone Metals Ltd (ASX:CLE) has received firm commitments from institutional and sophisticated investors to raise $1.35 million through a placement of fully paid ordinary shares at an issue price of $0.0025 per share.
The company intends to apply the funds raised from the placement towards the proposed work program on the Block 103 Magnetite Iron Ore Project, costs of the Labrador transaction and for general working capital requirements.
Notably, Block 103 is the largest undeveloped magnetite iron ore project in the world having a historical mineral resource of 7,200 million tonnes at 29.2% iron.
The project is in the world-class Labrador Trough iron ore mining district of Canada. ‘The Trough’ has claimed a prominent place in the Canadian mining sector having produced more than 2 billion tonnes of ore over 50 years.
Cyclone expects that the completion of the Labrador transaction will occur once it receives the necessary shareholder approvals for the issue of the consideration shares.
Back to iron ore roots
Cyclone executive director Tony Sage said: “Block 103 is an exceptional project and takes us back to our iron ore roots, we look forward to developing a plan for this high-potential opportunity”
The Labrador trough is home to some of the global iron ore majors such as Bloom Lake, Champion Iron, Rio Tinto (ASX:RIO), ArcelorMittal and Tata Steel.
Furthermore, the project is adjacent to Tata Steel's iron ore operations as well.
Looking ahead, the global magnetite iron ore market, which is valued at US$23 billion is expected to expand at a compounded annual growth rate of 5.43% from 2022 to reach US$31.6 billion in 2027.
Historical drilling
Block 103 comprises two zones of mineralisation: the Northwest Zone and the Greenbush Zone.
Some 115 holes aggregating 28,021 metres have been drilled so far, mostly to explore and extend the Greenbush Zone.
A 2012 program was focused on this area and comprised 72 drill holes aggregating 22,359 metres.
Drilling was completed along grid lines that were 500 to 600 metres apart and covered an approximate northwest-southeast strike length of 4 by 2.5 kilometres, testing mineralisation to a vertical depth of 450 metres.
The Greenbush Zone’s historical MRE of 7.2 billion tonnes at 29.2 iron was based on results from 81 diamond drill holes totalling 23,735 metres along a 4,000-metre strike length at the north-central portion of the project.