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Shree Minerals Tops Up Cash Reserves For Iron Ore Production At Nelson Bay River

Shree Minerals (ASX: SHH) is raising $2,136,000 through a private placement of 13.35 million shares priced at $0.16 each to RB Energy Pte Ltd to increase its working capital.

It will also seek shareholder approval to issue a further 4,587,500 shares to RB Energy to raise a further $734,000.

The company is just weeks from making its first shipment of iron ore from its Nelson Bay River (NYSE:NBR) Iron Project in northwest Tasmania.

Shree recently commenced production from the DSO south pit in November 2013 where the iron ore mined is crushed to produce Lump and Fines products.

Transportation to port stockpiles commenced in November 2013, with first shipping of iron ore expected to be in late December, first week of January 2014.

The DSO South Pit has a JORC Reserve of 650,000 tonnes at 56.7% iron while the overall Resource is 870,000 tonnes at 57.7% iron.

Production from NBR is expected to be about 400,000 tonnes per annum for 2.3 years.

Analysis

While cash flow from the Nelson Bay River project is imminent, the placement gives the company financial flexibility and working capital as the company ramps up production and begins shipping of iron ore.

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