Rights Issue Raises Stakes for Razorback’s DFS Funding and Regulatory Progress
Magnetite Mines Limited has announced a renounceable rights issue to raise up to $2.65 million, aiming to fund critical development milestones for its Razorback Iron Ore Project and secure strategic partnerships for DFS funding.
- 1 for 3 renounceable rights issue at $0.065 per share with 25-30% discount
- Partial underwriting of $0.5 million by Mahe Capital
- Free attaching options exercisable at $0.12 over 2.5 years
- Funds to support DFS funding, mining lease approvals, water supply studies, and tenement assessment
- All directors participating; rights tradable on ASX from August 12
Capital Raise to Propel Razorback Development
Magnetite Mines Limited (ASX – MGT) has launched a renounceable rights issue to raise up to $2.65 million, offering shareholders one new share for every three held at a discounted price of $0.065. This move aims to provide the working capital necessary to advance the Razorback Iron Ore Project in South Australia, a significant asset boasting a 6.6 billion tonne magnetite resource.
The rights issue is partially underwritten to $0.5 million by Mahe Capital, with each new share accompanied by a free attaching option exercisable at $0.12 within 2.5 years. Shareholders can trade their rights on the ASX, adding flexibility to participation.
Strategic Partnerships and Project Milestones
Funds raised will be directed towards securing binding agreements with strategic partners, notably JFE Shoji Australia Pty Ltd, to fund the completion of a Definitive Feasibility Study (DFS). This study is critical for moving Razorback towards a final investment decision. The company has made notable progress, including increasing its mineral resource estimate and lodging a mining lease proposal with South Australian authorities.
Additional capital will support regulatory approvals, further de-risking studies focused on water supply; a key operational consideration; and exploration of the company’s South Australian tenement portfolio for gold and critical minerals, capitalising on favourable market conditions.
Board Confidence and Market Context
Chair Paul White emphasised the strategic importance of Razorback amid the steel industry's transition to low-carbon production methods, particularly the growing demand for premium-grade magnetite concentrates used in Direct Reduced Iron (DRI) processes. The company’s engagement with Japan’s steel sector, including JFE Group, underscores the project's global relevance.
Despite a challenging macroeconomic environment, Magnetite Mines has streamlined costs significantly over the past year, maintaining a lean management team to sustain critical project momentum and stakeholder relationships.
Shareholder Participation and Next Steps
All directors have committed to participate in the rights issue, signalling confidence in the company’s strategy and prospects. Eligible shareholders in Australia and New Zealand can subscribe or trade their rights from August 12, with the offer closing on August 29.
The company’s next milestones include finalising DFS funding agreements, progressing mining lease approvals, and advancing innovative saline water processing technology, which could reduce project capital costs significantly.
Bottom Line?
The success of this capital raise will be pivotal in shaping Razorback’s path to production and Magnetite Mines’ role in the evolving green steel supply chain.
Questions in the middle?
- Will Magnetite Mines secure binding DFS funding agreements with JFE Shoji and other partners?
- How will the company’s saline water ore processing technology impact project economics?
- What level of shareholder uptake and market response will the rights issue attract?
