Western Australia-based iron ore producer Gindalbie Metals announced that it will raise A$209 million to fund the Karara iron ore project located in Western Australia. The Karara project is said to have a production potential over 30 million mt per year.
The equity raising will include a one-for-three non-renounceable rights issue to shareholders at 67 cents per share. $119 million will be raised through the institutional component of the rights issue, including the placement to Chinese shareholder Ansteel, while $90 million is expected to come from retail shareholders.
As SteelOrbis previously reported, the equity raising is caused by the increase in the construction cost of the project which is recently revised as A$2.57 billion. Gindalbie also stated that Ansteel who has a 36% holding in Gindalbie showed its support to the equity raising program.