Tungsten will list under the code TGN following an IPO to raise $5 million, with over subscriptions up to $8 million.
Magnetic has entered into an agreement with Tungsten Mining relating to information possessed by Magnetic on the Lake Seabrook area.
Under the agreement, Magnetic will retain the rights to precious metals on tenements that Tungsten applied for in the Lake Seabrook area.
Consideration is the issue of 500,000 shares in Tungsten representing around 0.53% of the issued capital of the company.
Tungsten's primary objective is to determine the feasibility of exploiting a tungsten deposit present on mining lease ML08/0314, over which it holds rights in the Ashburton region of Western Australia.
The company believes, based on the results of earlier exploration activities and metallurgical investigations carried out in the 1970s and 80s, that a high grade tungsten mine could be developed on ML08/0314 with an accelerated development program.
China dominates the world supply of tungsten, and there have been no significant new tungsten mines developed outside China since 2008 to meet the expected demand growth of 6% per annum.
Tungsten believes this creates an opportunity to become a significant producer of the metal during a period of strong demand and rising prices, and, from a self-funding base, to investigate the other projects in its extensive project pipeline, including the Lake Seabrook tenements.
Meanwhile, Magnetic has begun drill testing an 8.5 kilometre strike of magnetite anomalies at its wholly owned Calingiri iron ore project.
The Calingiri project in Western Australia is strategically located about 10 kilometres south of Cliffs Natural Resources' (NYSE: CLF) Yerecoin magnetite project where a resource of 186.8 million tonnes at 30.9% iron has been reported.
The move to begin drill testing follows encouraging surface sampling results, ranging from 40.1% Fe and 23.7% Si02 to 57.3% Fe and 7% Si02, confirming the presence of weathered, iron-enriched magnetite banded iron formation (NYSE:BIF) at the southern end of Magnetics' exploration licence.
Aeromagnetic data shows that high amplitude magnetic anomalies, interpreted to reflect magnetite BIF, extend for a strike length of at least 8.5 kilometres in the southern half of the tenement.
Situated 100 kilometres northeast of Perth, Calingiri forms part of Magnetic's extensive southwest Western Australia iron ore holdings, targeting both direct shipping ore grade hematite and premium quality magnetite deposits close to rail and port infrastructure.
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