Strategic Minerals SML. LN one of London's few junior listed iron ore plays currently in the production phase, announced last week that they had raised £3,125,000 to fund ongoing development of their Cobre Magnetite Project at their New Mexico Site.
A revised upward forecast of 70,000 tonnes per month of magnetite, shipped through the soon to be connected rail spur, is certain to add significant income flows to the company over the next twelve months. With the market losing appetite for pure play exploration play propositions, SML is appealing to investors, both private and institutional, because of its cash generating lower risk profile that is backed by a strong portfolio of infrastructure supported iron ore projects located across Australia.
Highlights:
· £3,125,000 raised through a placing of new shares;
· Funds raised through the issue of 39,062,500 new ordinary shares at a subscription price of £0.08 per share with an attaching warrant to purchase one ordinary share at an exercise price of £0.12 per share exercisable at any time at the holder's option on or before 30th April 2014;
· Institutions and high net worth individuals participated in the round;
· Funds raised to be used in part for the final rail refurbishment payment at the Company's New Mexico site and to develop further near-term revenue generating iron ore projects.
Strategic Minerals Plc (AIM: SML; USOTC: SMCDY), the magnetite iron ore producer and exploration company, is delighted to announce that it has raised £3,125,000 before expenses from institutional and other investors through the subscription to 39,062,500 new ordinary shares of £0.001 each (the "Subscription Shares") at a price of £0.08 per Subscription Share with an attaching warrant to purchase one ordinary share at an exercise price of £0.12 per share exercisable at any time at the holder's option on or before 30th April 2014. The placement was conducted for the Company by Intrinsic Capital LLP.
The funds raised will be used in part for the final rail refurbishment payment at the Company's New Mexico site and to develop further near-term revenue generating iron ore projects. Although later than previously anticipated, completion of the rail upgrade is now imminent which will enable increased shipments of magnetite from the site to begin. Shipments continue to be made by truck for the time being.
Steven Sanders, Chairman of Strategic Minerals, said:
"We are delighted to announce this successful placing and in particular the interest shown by new institutional investors participating in the round. This funding will be used partly to make the final rail refurbishment payment at our Cobre project in New Mexico and allow for significantly increased shipments of magnetite to commence from the site. When operating at full capacity, the Company will be able to ship up to 70,000 tonnes per month from this location which is ideally positioned within the major U.S market. The Board is further encouraged by the multiple, profitable end markets in addition to the underlying iron ore market that we are able to serve from our first magnetite stockpile."
Application will be made for the Subscription Shares to be admitted to trading on AIM ("Admission") and it is anticipated that Admission will occur on or around 11 May 2012. On Admission the Subscription Shares, will rank pari passu with the Company's existing ordinary shares of £0.001 each ("Ordinary Shares").
Following Admission the total number of Ordinary Shares in issue will be 448,158,893. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Services Authority's Disclosure and Transparency Rules.
The placement was carried out within the Company's existing share authorities.
