PERTH (miningweekly.com) – Dual-listed phosphate developer Minemakers has introduced a new cornerstone investor to its share register.

The miner reported this week that it would place some 14-million fully paid ordinary shares to fertiliser investor Vulcan Phosphates at a price of 18c a share. The placement price represented a 33% premium to Minemakers' last closing price on March 28.

Vulcan has also been granted the option to acquire a further 14-million shares at 30c a share, exercisable until April 2017.

Post placement, Vulcan would hold a 5.7% interest in Minemakers, with the option to increase its shareholding to 10% by exercising the options granted.

Minemakers MD Cliff Lawrenson said that the introduction of Vulcan to the share register was expected to be highly beneficial to Minemakers on a number of levels, as Vulcan had deep commercial and operational knowledge of the fertiliser market.

During June last year, Minemakers launched a search for a strategic partner to develop its Wonarah project, in Western Australia, and in December that same year sold off its interest in the Namibian Sandpiper project for A$25-million in cash.

“Following the successful sale of our Namibian assets in late 2012, we are delighted to reach another major milestone and welcome Vulcan as a cornerstone investor and strategic partner in Minemakers,” said Lawrenson.

He noted that the Vulcan's investment was a value-adding strategic investment, rather than a means to raise funds.

“This investment by Vulcan, with its deep understanding of world fertiliser markets and impressive fertiliser investment track record, is a strong endorsement of the potential to apply improved hard process (IHP) at Wonarah to create a significant high-value phosphate production facility.”

Vulan is a major investor in JDCPhosphate, which is the private developer of the IHP. IHP is a thermal technology that improves the efficiency of superphosphoric acid production from rock phosphate.

Lawrenson noted that implementing IHP at the Wonarah project presented significant capital and operating cost advantages, as well as environmental benefits.

“A key benefit of IHP is its ability to be constructed in 200 000 t/y phosphate production modules. This means that the rate of development of Wonarah is flexible and would start initially with one or two kilns, significantly reducing reliance on third-party financing as operating cash flows could be used to finance future expansion.”

Lawrenson said that the company would now look at finalising the bankable feasibility study at Wonarah, once JDC successfully commissioned its IHP plant.