Macarthur JV partner steps up in $2M raise
Macarthur Minerals' $2 million capital raise could open the door for joint venture partner and mining contractor Gold Valley Yilgarn to become a cornerstone shareholder in Macarthur, with Gold Valley agreeing to underwrite Macarthur's rights issue. The new entitlement offer will help fund Macarthur's general expenses until a Western Australian hematite royalty starts rolling in.
Macarthur announced the pro rata non-renounceable offer on Friday, which entitles eligible shareholders to subscribe for one new share at 2 cents a share for every two existing shares held. The company has sweetened the offer with a free option attaching to every two new shares subscribed for, with a 3c a share strike and a two-year horizon.
Gold Valley is a private, Perth-based exploration and mining development company with big ambitions. It is owned and chaired by savvy Perth-based iron ore player Yuzheng Xie and earlier this year lobbed a $73M takeover bid over the fence at the Mark Creasy-backed CZR Resources. That bid was ultimately overtaken by the deeper-pocketed Rio Tinto, but speaks to Gold Valley's ambitious nature.
'We are pleased to have secured the full underwriting support of Gold Valley, which recognised the opportunity and committed without hesitation.'
Macarthur Minerals executive chairman Cameron McCall
Macarthur and Gold Valley signed a joint venture agreement in June last year granting Gold Valley the right to mine hematite iron ore from Macarthur's Lake Giles Ularring prospect in WA.
That broader Lake Giles project has more than 1.2 billion tonnes in magnetite iron ore resources, including a hefty 272 million tonnes of defined reserves in WA's Yilgarn region.
The Ularring hematite deposit, which is the subject of a royalty deal with Gold Valley, includes 54.5Mt grading 47.2 per cent iron in indicated resources and 26Mt at 45.4 per cent iron in the inferred category.
The deal includes a milestone $5M payment upon Gold Valley mining and selling 1M tonnes of hematite and a further $5M payment for the next 1M tonnes of ore.
Beyond the initial tonnages, Macarthur will receive a $1 per tonne royalty for all additional tonnes for the life of the mine.
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