Changing of the guard as Magnetite Mines closes in on landmark DFS at high-grade Razorback Iron Ore Project
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Magnetite Mines has rejigged its management team as it advances mine funding discussions for its major Razorback iron ore project in South Australia.
Resources industry heavy hitters Mark Eames and Stephen Weir have been named Chairman and acting CEO respectively, as current Executive Chairman and CEO Peter Schubert moves into a role as a Non-Executive Director.
Eames and Weir previously held roles as Technical Director and Chief Development Officer of Magnetite Mines (ASX:MGT), where they have helped Schubert deliver a new vision for Razorback as a staged mine with low capital costs for a magnetite development.
Completing the changes, MGT’s General Manager of Geology Trevor Thomas will move into the role of Study Director to lead the key Definitive Feasibility Study program due to be completed by the end of 2022.
The Razorback mine is expected to be operating by 2024, at a cost of around US$500M – a fraction of the capex required for the project when it was first studied a decade ago.
It could be scaled up incrementally to 5Mtpa and 7Mtpa after its initial stage 1 development as demand for high-grade iron ore increases amid efforts to transition to a greener economy.
As outgoing Executive Chairman and CEO, Schubert said he was “tremendously proud” of the progress MGT has made to reposition and transform its business.
“Today’s announcement marks yet another resolute move to improve shareholder value and I am now looking forward to continuing our strategic transformation as a member of the board and fully support these changes to our leadership structure which will set us up to build an operating iron ore business.”
In Eames and Weir, MGT has brought two experienced operators into key roles to spearhead the next phase of its growth.
Eames is an expert in the iron ore market who has held senior executive roles at some of the world’s largest iron ore businesses with Glencore, Rio Tinto and BHP.
Weir was previously Managing Director of RFC Ambrian, one of Australia’s best known corporate finance advisory firms with 20 years of experience providing insights and support to clients in the mining and energy sectors.
Eames said the company has a robust pathway to production at Razorback.
“I wish to thank Peter for his persistence and vision, which has been essential in taking the company to the threshold of mine construction and operation. I look forward to continuing to work with him and other board members as we complete the DFS and look to establish a significant magnetite iron ore mine,” he said.
“We have a robust pathway to production and I am confident that these changes will strengthen the company’s position to grow the business and release long-term, sustainable value.”
Weir said the DFS is the main focus now.
“I welcome the opportunity and confidence shown in me by the board and look forward to leading the team as we embark on the next stage of the company’s development,” he said.
“My focus is on successful completion of the DFS, securing mine funding and implementing strategies and structures to drive this significant growth opportunity for the benefit of all shareholders.”
The news comes after the appointment of two independent non-executive directors this year, in former Drillsearch chair Jim McKerlie and former Brisbane Broncos CEO and Anglo American and Xstrata executive Paul White.
“The company is committed to the highest standards of corporate governance and this, along with the appointment of two additional non-executive directors to the board this year, will ensure that the board is structured to be effective and add value consistent with ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations,” Eames said.
Meanwhile, MGT has received the support of its shareholders to complete a 1 for 5 renounceable rights issue to raise up to $15.8m.
Schubert said the raising positions MGT for future success at Razorback and ensures existing shareholders are prioritised as it locks in funding to complete the DFS.
“We thank our shareholders for their continued support which has been instrumental in taking the company to this exciting point of transformation,” he said.
“With this rights issue, the board continues to ensure shareholders have priority access to fundraising and the opportunity to share in the company’s growth and development as it positions itself for long-term success as a significant iron ore producer.”
Along with the final DFS on the flagship Razorback mine the funds will also be used to progress discussions with financiers. They will also be put towards general working capital and the expenses of the offer.
The raising is partially underwritten by lead manager Mahe Capital to the tune of $5m and priced at 2.5c a share, a 39% discount to its last price of 4.1c and 26% to the 30-day VWAP.
For every two new shares issued, participants in the raising will also receive a free attaching option that will have a one-year term and exercise price of 5c.
For more information on the rights issue, go to www.magnetitemines.com
This article was developed in collaboration with Magnetite Mines, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.