A 1:4 fully underwritten rights issue at $0.22, with a free option for every 2 shares, will raise A$1.76 million for Buxton Resources (ASX: BUX).
The inflow of funds will predominately be used for the Zanthus project, where a significant iron discovery was made towards the end of 2010.
This is the first recorded magnetite occurrence in the area, with Buxton's initial results suggesting wide zones of primary magnetite mineralisation, with the potential to be beneficiated to a high quality iron ore concentrate.
Importantly, Zanthus is strategically located 25 kilometres south of the trans-Australian rail line that connects to the port of Esperance.