9th Oct 2014 09:05
LONDON (Alliance News) - Ferrum Crescent Ltd Thursday said it will seek to raise about AUD2.0 million before costs through a discounted rights issue, money it will use to fund the completion of the bankable feasibility study at its Moonlight iron ore project in South Africa as well as for corporate overheads.
The South Africa iron ore developer has been seeking funding for its Moonlight iron ore project and to pay its debts. It is still developing the project, with future work focusing on optimising the pelletising technology process and undertaking activity such as temperature profiling and treatment times.
In a statement Thursday, it said it will issue two new shares for every three of its existing shares. The rights issue has been partly underwritten for the first AUD860,000 by Patersons Securities Ltd.
It is offering AUD0.008 a new share for its Australian Securities Exchange-listed shares, a 33.33% discount to the closing price on October 8. UK shareholders will be offered 0.44 pence a new share, a 16.2% discount to the closing price of its AIM-listed shares on the sale day. In South Africa, it is offering ZAR7.88 per new share, a 47.46% discount.
"The directors of the company consider it to be the correct time to move the bankable feasibility study process significantly forward due to the infrastructure upgrade programmes currently underway in and in support of Limpopo," it said.
The objectives of the study are to assess the economic viability of extracting iron ore from a low stripping ratio, open pit mine to then be slurried to an existing Transnet rail terminal, where a high-grade pellet can be produced and shipped.
Ferrum expects the project will produce a pellet product with a 68-70% grade, and is hoping that will position it favourably in comparison with its peers due to the price premium high grade iron ore can demand.
"The company will deploy funds from the rights Issue to complete final costings for most of the major mining and processing elements. Completion of this phase of work will allow for final negotiations and planning with major infrastructure partners (Transnet Rail, Transnet Port and Eskom) and local communities," it said.
Ferrum Crescent shares were up 4.8% at 0.550 pence Thursday morning. It had earlier asked for its ASX-listed shares to be suspended pending the capital raising announcement.
By Steve McGrath; [email protected]; @stevemcgrath1
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