IronClad Mining (ASX: IFE) has raised even more funds to support ongoing development of the Wilcherry Hill iron ore mine on South Australia's Eyre Peninsula, indicating the strong backing the company has from investors.
Due to high demand for IronClad shares, the company has placed a further A$4 million with Australian and overseas institutional and professional investors at $0.85 per share.
Investors are seeing the value in this company as it prepares to become the second smaller mining company to move into production in South Australia.
Stage One of the Wilcherry Hill project is on target to begin maiden production in the current March quarter, with inaugural exports to be achieved in the June quarter of this year.
The significance of nearing production at Wilcherry Hill is cashflows from the project will be able to support Feasibility Studies on IronClad's massive Hercules project, situated about 15 kilometres east of Wilcherry Hill.
This latest equity raising takes IronClad's overall raising in recent months to more than $13 million.
Importantly, this amount should increase further with options expiring at the end of March likely to be exercised, potentially realising a further $12 million - bringing the total raised to more than $25 million.
Chairman Ian Finch said the continued success of IronClad's capital raising program was being driven by strong local and international investor demand as development of the Wilcherry mine continues apace.
He said the $4 million from the most recent equity raising would be used to accelerate start-up works at the emerging mine.
"The high level of interest and support we are attracting from enthusiastic institutional and professional investors is most welcome to the company and its mine development program," Finch said.
"Among other things it has enabled us to pay the South Australian Government a $5.8 million environmental bond for our proposed mine, which continues to march towards maiden production.
The $4 million share placement was organised by Cygnet Capital which was also involved in IronClad's successful $3 million share placement in February this year.
Wilcherry Hill - rapid advance towards cash flow
IronClad is expecting to export about 1 million tonnes in its first full year of production, increasing to 2 million tonnes in its second year.
The first two years of production from Stage One of the Wilcherry Hill project has already been sold to the Chinese steel mills under a comprehensive sales contract and marketing agreement.
A Feasibility Study for Stage One of the project established that, with an average iron ore price of $140 per tonne free on board (net of freight charges) into China and initial operating costs of around $85 per tonne, the project would provide IronClad with margins of $50 per tonne and an operating cash flow of around $80 million per year at full production during the first stage.
IronClad is expecting to secure debt financing through Australian and international financial institutions over the next few months.
Former Brockman Resources MD Leads IronClad
Among his accomplishments, Richards was most recently managing director of ASX-listed Brockman Resources, whose principal project - the Marillina iron ore project in Western Australia's Pilbara region - expanded significantly during his four years with the company.
Prior to that, he held a senior executive position with BHP Billiton's Iron Ore Division, with responsibility for integrating projects across BHP's three iron ore business sectors - mine, port and rail.
"Our new managing director, former Brockman Resources head Wayne Richards, commenced work with us last week, and has hit the ground running, driving development of the project," Finch said.
During Richards' tenure with Brockman, he grew the company from an exploration company with a market capitalisation of $30 million to close to $1 billion in just four years.