Northern Iron (ASX: NFE) wholly owns the Sydvaranger Iron Project in northern Norway. The company is currently evaluating the feasibility of doubling production at the project to 5.6Mt dry concentrate per annum.
Northern Iron completes $14.3 million institutional placement bookbuild
Northern Iron (ASX: NFE) has wrapped up a $14.3 million institutional placement to fund capital rectification works required to address plant performance at the Sydvaranger iron ore project in northern Norway.
The placement of 9.86 million new fully paid ordinary shares announced yesterday at a price of A$1.45 per share.
The Institutional Offer was well supported with very strong demand from both new and existing institutional investors.
The Institutional Offer was part of a A$55.3m equity raising that included OM Holdings agreeing to subscribe for 28.25 million new shares at A$1.45 per share to raise A$41.0m, equating to a 10% shareholding interest.
Proceeds from the Institutional Offer and OMH Placement will be used to fund capital rectification works required to address plant performance at the Sydvaranger iron ore project and provide Northern Iron additional working capital flexibility.
The Sydvaranger Iron Project has an estimated mine life of 19 years at an annual production rate of 7 Mtpa of mill feed. After processing, this is expected to produce approximately 2.9Mtpa of magnetite concentrate.
Northern Iron Chairman Neil Hamilton said the investment by OMH combined with its additional technical expertise and input and the ongoing support from existing shareholders was a strong endorsement of the company’s outlook as its completes the transition to iron ore producer.
The Institutional placement will settle on Thursday 28 January 2010. The trading halt, which has been in place since 10.00am Wednesday 20 January 2010, will be lifted prior to the commencement of trading on the ASX today.
