Magnetite Mines Ltd (ASX:MGT) has boosted its war chest for the Razorback Iron Ore Project in South Australia by way of an oversubscribed rights issue that raised $6.5 million, $300,000 above the original target.
The strong show of support from shareholders, directors and new investors introduced via Mahe Capital signals a vote of confidence in the company and the Razorback project.
MGT is now funded to complete and submit the Razorback Project Mining Lease Proposal as well as to advance strategic partnering and value engineering work.
Supports company vision
Magnetite Mines chair Jim McKerlie said: “On behalf of the board, I would like to thank all shareholders that have participated in this rights issue and to warmly welcome new shareholders onto MGT’s register.
"There is no doubt that raising equity capital this year has been challenging, and we truly appreciate your support against this backdrop.
“Two years ago, our company correctly identified that the steel industry transformation is both gaining momentum and that a supply deficit for premium-grade iron ore products like those that we believe will be produced from our Razorback Iron Ore Project will emerge.
"Accordingly, we have transformed the business to become a credible project development company that is now in detailed discussions with potential project partners for the development of Razorback.
"We are progressing the definitive feasibility study (DFS) for a 5 million tonnes per annum Stage 1 production operation, and we will soon lodge our Mining Lease Proposal with the South Australian Government.
“Our vision is to become a substantive premium-grade iron ore producer that will support Australia becoming a value-adding leader in the green steel supply chain, creating jobs, economic prosperity for South Australia and long-lasting deep value for shareholders.”
Exceeds $6.2 million target
The rights offer, together with the shortfall offer and the underwriting, raised the original amount sought of $6.2 million.
In addition, the MGT board exercised its discretion to accept over-subscriptions received via Mahe Capital such that the total amount raised is $6.5 million (before costs).
The company will issue 21,666,649 new fully paid ordinary shares and 10,833,188 new options (subject to rounding) exercisable at $0.45 and expiring on May 23, 2025. The options will be listed on the ASX and have the ASX code MGTO.
The shares and options to be issued under the oversubscription will be issued in line with the company’s existing placement capacity under ASX Listing Rule 7.1.
Mahe Capital Pty Ltd acted as the lead manager and underwriter to the offer.
“Green steel transformation”
“In contrast to tough equity markets over the course of 2023, the momentum in green steel supply chain transformation has gathered steam,” Magnetite Mines CEO Tim Dobson said.
"Our Razorback Project has never been more in focus by regional steelmakers seeking to invest in offshore green iron development centred around premium-grade iron ore supply.
"The opportunity for Australia to develop a value-added, green iron export industry has not been lost on government either, with both South Australian and Federal governments now openly discussing the importance of magnetite and setting strategy accordingly.
“I welcome and appreciate the support from patient and committed shareholders in this rights issue, as well as from new shareholders, backing MGT and its vision.
"Our team is committed to the rapid and rigorous development of Razorback, timed to meet the emerging demand for premium-grade iron ore products and the attraction of international investment in future green iron hubs.”
MGT thanks shareholders for their support and welcomes new shareholders introduced by Mahe Capital to the register.
The new securities are expected to be issued on Thursday, November 23, 2023, in accordance with the timetable in the prospectus, and will commence trading on the ASX on a normal settlement basis from Friday, November 24, 2023.