Punters scaled back after oversubscribed Macarthur raise

Macarthur Minerals’ Lake Giles iron ore project received a shot in the arm this week after punters scrambled to get a piece of its over-subscribed A$7.5M capital raise. In a sign that the project is starting to muscle its way onto a few radars, Macarthur’s stock was trading as low as $0.31 cents just a month or so ago and the latest raise got away at $0.50 – and was oversubscribed. The placement price represents only a 0.1% premium to the 30-day volume weighted average price of the company’s shares to 28 March 2022.

Fifteen million new shares are to be issued at $0.50 as part of the placement and they come gift wrapped with a one for one option with a strike price of $0.65 and an expiry date that is 24 months away.

The new capital will be pumped into the company’s Lake Giles magnetite iron ore project in Western Australia’s second iron ore province in the Yilgarn region. The money will go into working capital and post feasibility study optimization as Macarthur advances discussions on its main round of financing for the project.

The Yilgarn iron ore province extends from Wiluna in the north to Koolyanobbing near Southern Cross in the south and the mineralisation is dominated by magnetite compared to the dominant hematite of the Pilbara iron ore province.

Australia has the world’s largest estimated iron ore reserve with 52 billion tonnes representing thirty per cent of the global total reserve. Russia ranks second behind Australia with a meagre 25 billion tonnes representing 13 per cent of global reserves.