Gindalbie Metals Limited (ASX:GBG) has launched a $209 million capital raising to help fund its Karara Iron Ore Project in Western Australia.
Karara’s cost of construction has recently blown-out from $2 billion to $2.6 billion, and the raising is to fund Gindalbie’s share of the extra $600 million required to advance development.
The equity raising involves a 1 for 3 renounceable accelerated pro-rata entitlement offer at an issue price of $0.67 per share to institutional and retail investors.
Gindalbie’s largest shareholder and Karara joint venture partner, China’s Ansteel, has agreed to take up its portion of the new shares on offer.
Gindalbie Metals posted a profit of $313,000 in the first six months of the 2011 financial year.
