Iron ore company Gindalbie Metals Ltd
(ASX:GBG) has launched an equity raising to raise up to $206.4 million to help fund the development of the Karara Iron Ore Project in Western Australia.
The company says the raising will comprise of a $111.8 million share placement via an institutional bookbuild and a placement to its Karara joint venture partner and largest shareholder, Ansteel to raise between $63.2 million and $74.6 million.
In addition the company hopes to raise a further $20 million through a share purchase plan for eligible shareholders.
Gindalbie says depending on the amount raised in the share purchase plan, the placement to Ansteel will be adjusted to ensure the Chinese steelmaker remains with a 36.12% stake in the company.
The proceeds from the raising will be used to fund Gindalbie’s 50% share of the revised $1.975 billion construction estimate for the Karara project and also the company’s share of the project;s $430 million working capital requirements.
Managing director Garret Dixon says the capital raising is by far the most significant in the company’s history and marks the beginning of an exciting new chapter for the company and its long standing relationship with Ansteel.
For the year to June 30, 2009 Gindalbie posted a $26.22 million profit, down on the year before.
