PERTH (miningweekly.com) – Iron developer Flinders Mines will raise A$16-million through a nonrenounceable entitlement offer, priced at 5.5c a share.
Some 290-million new shares will be issued on the basis of one new share for every 11 existing shares held by eligible shareholders, with the offer price representing a discount of around 22% to the 30-day volume-weighted average price of Flinders shares for the period ending April 13.
Flinders said on Tuesday that the proceeds from the entitlement offer would be used to implement recommendations from an independent strategic review of the Pilbara iron-ore project (PIOP), in particular, to provide sufficient funds to implement a series of asset maturation programmes.
The strategic review found that the PIOP resource potentially provided for the development of an iron-ore mine; however, it noted that further understanding of mine planning and the metallurgy were required to confirm the project’s ability to operate at an economic production rate.
It was found that the optimal production rate for PIOP would be around 45-million tonnes a year, at between 58% and 59% iron, for a mine life of more than 14 years, subject to an infrastructure solution being available.
The review found that securing a commercially viable mine-to-port infrastructure arrangement was fundamental to the progression of the project.
The entitlement offer will open on May 17 and will close on May 26, with new shares to be issued on June 2.