PERTH (miningweekly.com) – ASX-listed junior Radar Iron is looking to raise about A$5.5-million through a rights issue and a share placement to private investment company Victory Mining.

The company on Monday reported that it would place about 26.1-million shares, priced at 3.5c a share each, to Victory to raise an initial A$0.9-million, which would result in the investment firm holding a 19.7% shareholding in Radar.

Furthermore, Radar would undertake a fully underwritten one-for-one renounceable issue to raise a further A$4.6-million. The rights issue would also be priced at 3.5c a share.

Victory would underwrite the rights issue, subject to the satisfaction of certain conditions, including lodging a prospectus for the rights issue and obtaining all the necessary approvals.

Proceeds from the placement and rights issue would fund the remaining A$2.9-million in payment obligations for the acquisition of the Yerecoin magnetite project, in Western Australia, and to provide working capital to progress technical studies needed to advance the project to a decision to mine.

A scoping study revealed that the Yerecoin main deposit would be the initial focus for mining activities, hosting an inferred resource of 146.5-million tons grading 68.8% iron and 2.8% silicon dioxide.

Radar was looking at a phased development for Yerecoin, with initial production targeted at 250 000 t/y of high-quality magnetite concentrate, using a small-scale production plant for an estimated capital cost of A$35-million.

Radar said on Monday that with the funding for the Yerecoin project development work now secured, the ongoing technical evaluation studies would ratchet up in scope. The studies into metallurgical properties, reserve definition and transport options were also continuing and negotiations with infrastructure providers to better define the cost structure were ongoing.

New drill campaigns would be planned following the pit definition work aimed at obtaining further samples for metallurgical assessments and to increase the confidence in the current resource base.

Drilling plans for the potential high-grade direct shipping ore Uruara project, in Brazil, would also be finalised so first pass drilling could be completed in the coming months.