Hawsons Iron (ASX:HIO) shares drop on $5m placement

• Hawsons Iron (HIO) completed $5 million institutional placement of 62.5 million shares at 8 cents each to fund working capital
• The company says the heavily discounted price reflects the “difficult equity market conditions and prevailing investor sentiment”
• It comes after Hawsons reported difficulties in maintaining its level of operations due to rising global costs and deteriorating economic conditions
• The company hopes the placement will enable it to completes its review of options to scale up its namesake project and recommence the revised bankable feasibility study
• HIO shares dropped 24.2 per cent, trading at 9.1 cents just before market close

Hawsons Iron (HIO) has completed a $5 million institutional placement of 62.5 million shares at 8 cents each to fund working capital.

The issue price represents a hefty 27.27 per cent discount to the company’s 15-day volume-weighted average price ending November 25, 2022, of 11 cents.

Hawsons Iron said the discounted price was reflective of “difficult equity market conditions and prevailing investor sentiment.”

It comes after Hawsons reported difficulties last month in maintaining its level of operations due to rising global costs and deteriorating economic conditions.

The company had to slow down the pace of work on the bankable feasibility study (BFS) at its namesake project near Broken Hill in New South Wales.

The BFS was originally scheduled for completion by the end of this year but Managing Director Bryan Granzien said the company had “no other choice” due to the economic pressures.

“Importantly, securing these funds provides working capital to enable us to complete our strategic review of options for scaling up development of our flagship Hawsons iron project and recommence work on a revised BFS based on a new approved start-up tonnage,” Mr Granzien said.

Hawson’s fully paid shares on issue have increased from 733.5 million, to 769 million, 7.85 per cent of which Regal Funds Management now own.

HIO shares dropped 24.2 per cent, trading at 9.1 cents just before market close.