Magnetite Mines funds a new push for Razorback green iron

Capital raising targets Razorback’s next development phase

Magnetite Mines Limited (ASX:MGT) is asking shareholders for fresh capital to keep its Razorback project moving, targeting up to A$1.5 million before costs through a partially underwritten share purchase plan and a possible top-up placement. The SPP is capped at approximately A$1.03 million and backed by A$500,000 of underwriting from GBA Capital, while the additional A$500,000 placement remains conditional on market conditions, investor demand and available placement capacity.

The offer price will be the lower of A$0.015 a share or a 10% discount to the five-trading-day VWAP calculated at the SPP’s close. At A$0.015, the fixed price represents a 15.8% discount to the 15-day VWAP and an 11.8% discount to the last traded price cited by the company. Eligible shareholders can apply for between A$1,000 and A$30,000, with all directors who are eligible shareholders intending to participate.

Razorback work and partner search lead spending priorities

Magnetite Mines says the money will fund targeted technical and project development work following its September scoping study, alongside discussions with potential strategic, joint venture, funding and offtake partners. It also wants flexibility to assess complementary acquisitions or other transactions that could broaden its asset base or accelerate a route to production, while maintaining selective, capital-efficient exploration across South Australia.

The funding push follows a redesigned Razorback pathway that the company says is intended to reduce upfront capital and development risk. The configuration evaluates saline water for processing, prioritises higher-grade zones in the early mining schedule and includes a rail spur to the main line. Those features remain subject to further testing, engineering, approvals and later-stage studies rather than representing a construction-ready project.

Discounted shares come with conditional option dilution

For every SPP or top-up placement share issued, investors are intended to receive one free listed option, subject to approval at the annual meeting expected on 30 November. The options would carry an exercise price set at a 25% premium to the issue price and expire on 31 December 2029. GBA Capital is also entitled to one lead manager option for every three shares issued under the capital raising, also subject to approval.

Magnetite’s illustrative capital structure shows the consequence if the full A$1.5 million is raised at A$0.015: 100 million new shares would be added to 229 million existing shares, taking the total to approximately 329 million. That would put new shares at about 30% of the enlarged share count before any options are exercised. The actual outcome will depend on the final issue price, demand, any scale-back and whether the top-up placement proceeds.

Funding runway remains the central investor question

The presentation records approximately A$2.0 million of cash as at 30 June 2026 against A$2.7 million of convertible notes, with maturities falling between January and June 2028. The company’s own risk disclosure says it requires additional funding to continue as a going concern, progress Razorback towards a pre-feasibility study and maintain selected exploration. It also acknowledges that no binding strategic partner currently exists.

That makes the SPP more than a routine shareholder offer. It is a near-term funding bridge for a project whose value proposition still depends on technical refinement, approvals, infrastructure, partner support and further capital. The next meaningful markers are the amount actually raised, the fate of the top-up placement, shareholder approval for the options and evidence that the proceeds translate into defined Razorback study milestones.