JOHANNESBURG (miningweekly.com) – In a bid to generate capital to support the continued development of the company's African iron-ore and manganese assets, multicommodity asset developer Ferrex has entered into placing agreements to raise £1.65-million through the issue of 92.5-million ordinary shares.

Ferrex MD Dave Reeves said the additional capital would support the company as it looked to complete a number of milestones, which had the potential to add significant value to the company. 

“The funding will allow us to complete the definitive feasibility study at our Nayega manganese project, in Togo, continue operations at the Mebaga iron-ore project, in Gabon, until the proposed funding transaction has been completed, and pay for the ongoing feasibility study costs at the Malelane iron-ore project, in South Africa.

“With the anticipated near-term completion of various of these milestones, the company looks forward to providing further updates on each of the projects shortly, thereby benefitting from the equity swap arrangements,” he noted.

Ferrex explained that US-based investment fund YA Global Master (YAGM) had subscribed for 86.5-million new ordinary shares at a 1.8p a share for £1.557-million in aggregate, with 36.5-million of these shares to be placed out with a “select group of entities”.

This would result in YAGM having an interest of 50-million ordinary shares, representing 5.4% of the company’s issued share capital.

The company and YAGM had further entered into an equity swap agreement over 49.9-million of the subscription shares in return for a payment of £450 000 by Ferrex to YAGM.

Ferrex had placed an additional six-million shares at a price of 1.8p each.

The completion of the placing was conditional on admission of the placing shares to trade on the Aim of the LSE, which was expected on March 27.

Following admission, the company's enlarged issued share capital would comprise 9.4-billion shares.