PERTH (miningweekly.com) – Iron-ore developer Strike Resources has completed a A$4-million capital raising to fund work at its Paulsens East project, in Western Australia.
The company issued 40-million fully paid ordinary shares at a price of 10c each under its existing placement capacity, to sophisticated and professional investors, with Canaccord Genuity acting as lead manager to the placement.
The funds raised will be used to advance the development of the Paulsens East project, including finalising all appropriate governmental approvals to enable the grant of a mining permit, completing engineering designs for haulage roads and mine-related infrastructure, completing bulk metallurgical test work for final product specifications and process design, and finalising product offtake.
“With the feasibility study now completed, this capital raising allows Strike to continue to advance the development of Paulsens East, capitalizing on the current strong iron-ore price,” says Strike MD William Johnson.
“Paulsens East continues to offer investors exceptional upside exposure to the strengthening iron-ore market.
“The results of our recently completed feasibility study demonstrated that Paulsens East is a very attractive project, with the potential to generate in excess of A$270-million in pre-tax free net cashflow should iron-ore prices remain at their recent $115/t levels over the initial four-year mine life,” says Johnson.
The feasibility study indicates that the 1.5-million-tonne-a-year project will require a capital investment of A$15.7-million, and will deliver a net present value of A$140-million over its four-year mine life.
First ore production is being targeted for the first half of 2021.