Rights Issue Underwriting Rises as Magnetite Mines Eyes Rare Earth Growth
Magnetite Mines has launched a $2.65 million renounceable rights issue with increased underwriting support, following promising rare earth mineralisation findings at its Ironback Hill Project.
- 1 for 3 pro rata renounceable rights issue at $0.065 per share
- Free attaching options exercisable at $0.12 for 2.5 years
- Underwriting increased to $2 million by Mahe Capital Pty Ltd
- Rights trading under ASX code MGTRG until 22 August 2025
- Supports growth phase after rare earth mineralisation discovery
Capital Raise Launches Amid Exploration Upside
Magnetite Mines Limited (ASX, MGT) has officially opened its renounceable rights issue, aiming to raise up to $2.65 million through the issuance of new shares priced at 6.5 cents each. This capital raising initiative, which began trading on 15 August 2025 under the ASX code MGTRG, offers existing shareholders the opportunity to purchase one new share for every three shares held, accompanied by a free attaching option for each new share.
Enhanced Underwriting Reflects Confidence
The rights issue is underpinned by Mahe Capital Pty Ltd, which has increased its underwriting commitment to $2 million, signaling strong institutional support. This enhanced backing provides a safety net for the company’s funding ambitions, reducing the risk of the offer falling short and ensuring Magnetite Mines can pursue its strategic objectives without immediate capital constraints.
Strategic Growth Driven by Rare Earths Discovery
Managing Director Tim Dobson highlighted the timing of the rights issue as pivotal, coming on the heels of the company’s recent announcement of rare earth mineralisation at its 100% owned Ironback Hill Project in South Australia. This discovery adds a new dimension to Magnetite Mines’ portfolio, potentially enhancing the value proposition of its flagship Razorback Iron Ore Project and positioning the company to capitalize on emerging market demands for critical minerals.
Shareholder Participation and Market Implications
Eligible shareholders have until 29 August 2025 to participate, with the flexibility to trade their rights on the ASX until 22 August. The inclusion of free attaching options exercisable at 12 cents over 2.5 years offers an additional incentive, potentially delivering further upside if the company’s exploration and development efforts bear fruit. All new shares and options will rank equally with existing securities, maintaining shareholder equity structure post-issue.
Looking Ahead
As Magnetite Mines navigates this critical growth phase, the success of the rights issue will be a key indicator of market confidence in its expanded resource base and development plans. The company’s focus on producing premium iron ore products aligned with decarbonisation trends, combined with the rare earths potential, could attract renewed investor interest and reposition MGT within the mining sector landscape.
Bottom Line?
The outcome of this rights issue will set the tone for Magnetite Mines’ next growth chapter amid evolving market dynamics.
Questions in the middle?
- Will the rights issue fully subscribe given the increased underwriting?
- How significant is the rare earth mineralisation in enhancing project economics?
- What are the potential dilution effects on existing shareholders post-issue?
