Magnetite Mines (ASX:MGT) secures $15.8m in rights issue

• Magnetite Mines (MGT) secures its target of raising $15.8 million after closing its renounceable pro-rata rights issue to eligible shareholders on May 13
• The company will issue approximately 631 million new shares and around 315 million new options exercisable at five cents, expiring on May 20, 2023
• The proceeds will be used to complete technical investigations and engineering for the DFS for MGT’s Razorback Iron Ore Project and advance discussions with financiers
• The new securities are expected to be issued on May 20
• MGT shares are down 6.9 per cent, trading at 2.7 cents at market close

Magnetite Mines (MGT) has secured its target of raising $15.8 million after closing its renounceable pro-rata rights issue to eligible shareholders on May 13.

The company will issue approximately 631 million new shares and around 315 million new options exercisable at five cents, expiring on May 20, 2023.

The net proceeds of the rights issue will be used to materially complete technical investigations and engineering for the definitive feasibility study (DFS) for the company’s flagship Razorback Iron Ore Project and to advance discussions with project financiers.

Critical work planned includes DFS process plant design, additional metallurgical and water drilling, geotechnical investigations and advancing permitting and approvals.

Additionally, the proceeds will be used for general working capital and to cover costs associated with the offer.

CEO Stephen Weir said the capital raising builds on the momentum that Magnetite has generated through the technical milestones achieved since completing the pre-feasibility study (PFS) for Razorback last July.

“It was designed to reward shareholders with access to additional shares at what we believe to be a significantly discounted price and a preferential opportunity to share in the company’s future growth,” he said.

“Our recent expansion study confirmed Razorback’s significant upside potential and we are committed to ensuring the market recognises the inherent value of our extensive Braemar resources and the attractive high grade iron ore product we plan to produce.”

Mahe Capital acted as the lead manager and underwriter to the offer.

The new securities are expected to be issued on May 20, in accordance with the timetable in the prospectus.

MGT shares were down 6.9 per cent, trading at 2.7 cents at market close.