Fe Limited (ASX:FEL) (FRA:B4T) has received firm commitments for its $5.5 million placement via the issue of around 123.4 million shares at $0.045 per share to sophisticated and professional investors (before costs of raising).
The funds will be directed towards the development of the Wiluna West JWD Iron Ore Project and evaluation works, including further resource drill out, project approvals and milestone payment, at the Yarram Iron Ore Project.
Bell Potter Securities Limited acted as lead manager and bookrunner to the placement.
“Progressing JWD Project”
FEL executive chairman Tony Sage said: “We are pleased with the strong support for this raising and to welcome several significant Australian institutional investors to our register.
“We look forward to their ongoing support as we continue to grow the company.
“Post this placement the company has a cash balance in excess of $10 million which fully funds us to deliver the JWD project.
“We are making good progress on the JWD approval and development project streams and look forward to updating the market as milestones are ticked off in coming weeks.”
Shipping in second quarter
The company aims to begin shipping iron ore product from JWD in the second quarter of 2021.
FEL expects to begin mining during the current quarter as it locks in key mining and sales contracts and makes a final investment decision.
This will be followed by shipment in the June quarter, alongside an assessment of second-phase mining at the project, which the company hopes to begin in the September quarter.
Two-pronged iron ore strategy
In addition to the JWD Project, the company also has a 50% stake in the Yarram Project as part of two-pronged iron ore production strategy.
Yarram is not as advanced as JWD but the company intends to commence drilling, environmental and stakeholder work in the early months of 2021.
It is anticipated that the first iron ore product will ship from Yarram three months after a development decision, which is expected in the December quarter, following exploratory drilling and a JORC resource estimate.
Placement details
The placement issue price of $0.045 per share represents a 13.5% discount to the last close price and a 15.2% discount to the 10-day VWAP.
Placement shares are expected to be issued on February 25, 2021, consisting of 68,028,993 shares under ASX Listing Rules 7.1 and 55,352,662 shares under ASX Listing Rules 7.1A.
Additionally, the company has confirmed the issue of 5,650,000 fully paid ordinary shares following the exercise of 4,150,000 unlisted options at $0.02 expiring May 31, 2021, and the exercise of 1,500,000 unlisted options at $0.03 expiring March 13, 2021 - raising a total of $128,000.
