Hawsons Iron has completed an institutional placement to support working capital and its strategic review into its namesake iron ore project in New South Wales.
The company raised $5 million as part of the institutional placement, which involved the issue of more than 62 million new shares at $0.08 per share. This represented a 27 per cent discount to Hawsons’ 15-day volume-weighted average price (VWAP) of $0.11 as of Friday November 25.
Hawsons managing director Bryan Granzien said the pricing discount required to complete the placement reflected the difficult equity market conditions and prevailing investor sentiment.
“Importantly, securing these funds provides working capital to enable us to complete our strategic review of options for scaling up development of our flagship Hawsons Iron project and recommence work on a revised bankable feasibility (BFS) based on a new approved start-up tonnage,” he said.
Having slowed its BFS activity, Hawsons Iron is conducting a strategic review to evaluate the best pathways for the project.
It will also conceptually consider a multi-stage mining operation with a lower base production rate to “right-size” the project before eventually scaling up towards the development of the preferred 20-million-tonne-per-annum (Mtpa) operation.
This could involve using existing rail and port infrastructure to reduce upfront capital costs before the possibility of an underground slurry pipeline is considered.
The production phases would range from a minimum of 5Mtpa before achieving the ultimate goal of 20Mtpa.
In mid-November, Hawsons Iron announced it had signed a binding agreement with Flinders Ports for the potential development and operation of a greenfield port at Myponie Point in South Australia.
As part of the agreement and subject to further agreement in final transaction documents, it is envisaged that Flinders Ports would construct, own and operate the Myponie Point port, reducing the Hawsons Iron project’s capital requirements in the process, while enabling Hawsons to participate in future growth as the port’s ‘cornerstone’ customer.