Magnetite Mines Ltd (ASX:MGT) has raised $2.4 million via a rights issue to eligible shareholders with the funds to assist in finalising agreements to fund a definitive feasibility study (DFS) for its Razorback Iron Ore Project in South Australia.
The offer, a 1-for-5 pro-rata renounceable rights issue led by Mahe Capital Pty Ltd, together with the partial underwriting and shortfall amount taken up to date, has raised $2.4 million.
MGT issued 12 million new shares and an equal number of options, with the raise seeing strong support from directors and management, reflecting confidence in the project.
In July, the company signed a 'landmark agreement' with Japan’s second-largest steelmaking group, JFE Shoji Australia Pty Ltd, setting the framework for funding towards the DFS — the completion of which is central to progressing the Razorback Project to final investment decision.
"Continued support"
“On behalf of the board, I extend our appreciation for the continued support of shareholders that have participated in this rights offer, and welcome new investors that have participated in the shortfall facility to date,” said managing director Tim Dobson.
Magnetite Mines is focused on the development of magnetite iron ore resources in the highly prospective Braemar iron region of South Australia.
The company has a 100%-owned mineral resource of 6 billion tonnes of iron ore and is developing the Razorback Project, 240 kilometres from Adelaide, to meet accelerating market demand for premium iron ore products created by iron and steel sector decarbonisation with the potential to produce high-value direct reduction (DR) grade concentrates.
Razorback is set to become a long-life iron ore project with expansion optionality in a Tier-1 jurisdiction that will produce a superior iron ore product sought by steelmakers globally.
‘Green Iron Opportunity’ submission
“Yesterday, Magnetite Mines, along with a consortium of major industry partners, made a comprehensive submission to the South Australian Government’s ‘Green Iron Opportunity’ Expression of Interest process,” said Dobson.
“Our submission underscores the requirement for reliable, long-term, DR-grade magnetite concentrate production as the critical and necessary enabler for the creation of a green iron industry in South Australia.
“It further details a pathway that would see a green iron hub emerge in Port Pirie based on production from Razorback, with pellet-making, green iron production and export facilities heralding an entire new industry for the region and an economic game changer for South Australia.
“Underpinning the State and Federal governments’ intense focus on Australia’s green iron opportunity is the forecast global demand for exportable green iron products.
“We remain fully committed to developing our world-class Razorback Project in concert with government and strategic partner support, to secure this once-in-a-generation opportunity for shareholders, the state and the country.”