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- Hawsons Iron (HIO) signs a $200 million equity funding package with US investment group LDA Capital Limited, to obtain additional funding for its iron-ore project near Broken Hill in NSW
- The company will be entitled to draw down up to $200 million by issuing put options to LDA Capital across the four-year agreement with 71.5 million options to be issued to LDA
- Options exercised by LDA Capital will inject up to a further $50.05 million in equity capital into HIO
- The company says the low-cost funding package substantially reduces project financing risks
- Hawsons Iron shares are in the green, up 20.6 per cent to trade at 19 cents at 10:41 am AEDT
Hawsons Iron’s (HIO) shares spike as it signs a $200 million equity funding package with US investment group LDA Capital Limited, to obtain additional funding for its iron-ore project near Broken Hill in NSW.
The company will be entitled to draw down up to $200 million by issuing put options to LDA Capital across the four-year agreement, which HIO can access at its sole discretion.
HIO’s low-cost funding package comprises a 2 per cent facility fee totalling $4 million, payable within the 12 months agreement anniversary date, comprising $2 million in cash and the balance in shares.
In addition, HIO will issue 71.5 million options to LDA Capital, representing 125 per cent of the 90-day volume-weighted average price at the two-year anniversary of the issue of the options.
Options exercised by LDA Capital will inject up to a further $50.05 million in equity capital into Hawsons.
Hawsons Iron executive chairman, Bryan Granzien, says the company welcomes LDA Capital’s support as an international investment partner and is an outstanding achievement for HIO.
“LDA Capital’s support is a recognition of the quality of the Hawsons’ iron ore body, its commercial potential, and strategic value within the emerging Green Steel supply chain, as evidenced by the pricing of the associated options package,” he said.
“It is a strong signal to capital markets that we have a credible global funding option in place to assist the development of our world-class Hawsons Iron Project. The cost effective and flexible funding package affords HIO access to equity funds, if required. This provides enhanced certainty and the ability to deal with, among other things, any potential unforeseen events during project development,” Mr Granzien said.
LDA Capital co-founder, Anthony Romano, says the company is pleased with the quality of HIO’s resource asset and development strategy for the project.
“We look forward to playing a key role as a source of financial support for HIO, both in the
short and longer-term timeframes to enable the Company to grow the full value of a truly
world-class iron ore asset,” he said.
A bankable feasibility study for the Hawsons Iron project is underway and on track for completion in December 2022.
The company says leading research firm, Wood MacKenzie, has rated the Hawsons Iron Project as one the world’s best high-grade iron ore development projects.
With 70 per cent iron content, the iron ore project Hawsons Supergrade will attract a premium price and the softness of the orebody means less energy will be required to crush the ore and therefore, producing a higher grade of iron ore.
Hawsons Iron shares are in the green, up 20.6 per cent to trade at 19 cents at 10:41 am AEDT.
