PERTH (miningweekly.com) – ASX-listed Iron Road has launched a one-for-one non-renounceable entitlement offer to raise some A$50.7-million to complete the definitive feasibility study (DFS) of the Central Eyre iron project.

The entitlement offer would be priced at 18c a share, and has been fully underwritten by two of the company’s largest shareholders and private equity resources funds.

Some 291-million new shares would be issued.

Apart from funding the Central Eyre DFS, funds from the offer would also be used to enable Iron Road to continue the strategic acquisitions of property to support the combined mining, processing, rail and port operation.

The smaller-scale Gawler project would also receive a portion of the funds to establish the potential for shorter-term production, with lower capital outlay.

The Central Eyre DFS would likely be completed at the end of the year, and Iron Road was hoping to proceed to financing, construction and production soon after.

MD Andrew Stocks said on Thursday that the greatest value that could be delivered to shareholders would be the successful construction and operation of the Central Eyre project, following the DFS and financing completion.

“We expect the DFS will demonstrate the economics of our new project and provide the foundation we need to complete financing and partnership discussions for what would be the country’s largest magnetite project, targeting 20-million tonnes a year of high-grade concentrate.”

Stocks pointed out that Iron Road was on the tail end of the DFS, which covered mining and beneficiation studies, rail, port and social infrastructure, as well as marketing and impact assessments.

“We recognize that this is a major capital raising, particularly when considering the backdrop of recent poor market sentiment towards the iron-ore sector, even those in production.

“However, we have no doubt that hibernating our company until better market conditions arise is the wrong thing to do. This close to the finish line is not the right time to halt progress and set our projects back by months, or even years,” he added.