PERTH (miningweekly.com) – Iron-ore developer Centaurus Metals has launched a share placement to raise A$5-million in order to advance its Brazilian iron-ore projects.

The ASX-listed company said on Friday that it would place about 40-million shares, at A$0.125 each, to new and existing investors. Shareholders Atlas Iron and Liberty Metals & Mining Holdings have each subscribed for shares.

Centaurus would also launch a share purchase plan, with shares to be issued at the same price, with the aim of raising a further A$2-million.

MD Darren Gordon said that the capital raising would enable Centaurus to maintain its development momentum at Jambreiro, while the company completed the main funding package for the full development of the project, ensuring that initial site development activity continued, and placing Centaurus in the position to start procurement activities.

“Once the funding package is finalised, we will be able to move quickly to commence construction at Jambreiro, which is fully permitted and ready to go, with the mining leases granted and all other permits in place.”

The Jambreiro project would require an initial capital spend of A$53-million, and first production had been targeted for the first quarter of 2015. A revised production plan would incorporate the staged development of Jambreiro, which would see production subsequently increased to two- to three-million tonnes a year.

Gordon said on Friday that the company had been progressing discussions with financiers which were expected to contribute to the development funding package and due diligence activities currently under way.

“We expect to be able to push the button on the final funding package soon. The funds raised through this placement will strengthen our balance sheet and enable us to move forward to complete this process from a position of strength.”

Gordon added that part of the proceeds from the capital raising would also be used to advance the Candonga direct shipping ore (DSO) project, which was recently identified as a valuable add-on to the Jambreiro project.

“We have the opportunity to develop a low-cost, high-margin operation producing 300 000 t/y of DSO at Candonga, which will strengthen and enhance our production profile as well as our market presence in south-eastern Brazil.”

The incremental production opportunity would be progressed as quickly as possible and in parallel with the development of Jambreiro, Gordon said.