The company is now fully-funded to accelerate development plans to decision to mine.

As the pre-feasibility study at its Razorback High Grade Iron Ore Concentrate Project in SA nears completion, Magnetite Mines (ASX:MGT) is fully funded for its next stage of development after announcing a $7.5m options conversion this morning.

The MGTOC options, expiring on May 31, had an exercise price of 5c which represents a discount to MGT’s current trading price.

The conversion was subsequently well-supported by existing option holders, who converted more than 85% of the outstanding options on issue.

MGT has now issued 150,401,292 new fully paid ordinary shares from the conversion, and the additional $7.52m cash boost leaves it with a substantial cash backing of $17.5m as it advances development plans at Razorback.


Project update

Commenting on the announcement, MGT executive chairman Peter Schubert  thanked existing option holders for their “overwhelming support” of the options issue.

“It is Magnetite Mines’ intention to become an iron ore producer, and to do that in the most cost effective and timely manner possible. This financial contribution has supported that vision,” Schubert said.

Along with the pre-feasibility study, the extra funding now positions MGT to commence work on additional programs to design to accelerate the project’s development.

Engineering consultants Hatch are underway with a metallurgical test program to further assess the nature of MGT’s mineral deposits at Razorback.

With the additional cash boost, MGT will now deploy a diamond drill program for the acquisition of further samples.

Drilling plans comprise 25 diamond core drill holes for a total of 2,000m.

“A portion of the core will be retained for high resolution Davis Tube Recovery (DTR) test-work to significantly expand the existing DTR and geochemical dataset,” MGT said.

The company will also conduct infill drilling at the deposit site to further refine its JORC mineral estimate, which will support both “mine design optimisation” and the “structural design of the processing plant”, MGT said.

Elsewhere in its project update this morning, the company detailed the steps it’s taking to meet ESG (Environment, Social and Governance) as well as its obligations with respect to Native Title legislation.

In line with recommendation from environment consulting firm Eco Logical Australia, plans for a water drilling program have commenced to identify available groundwater resources.

Pending permit access, a drill program of up to 12 bores has been set for the September quarter to “test the suitability of the water resources in terms of supply volume, quality, sustainability of supply and any environmental and social impacts”, MGT said.

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.