Eastern Iron (ASX: EFE) has banked a further A$1.26 million from a share placement that was completed at a 28% premium to the average closing price of shares for the week prior to the placement.
The company has placed 22.8 million shares at $0.055 each with sophisticated investors to raise the funds which will be used to complete the Scoping Study at the Nowa Nowa iron project in eastern Victoria due for completion in November.
The placement represents the balance of shares available under the rights issue which closed on the 27 June this year.
If the results of the study are considered sufficiently encouraging Eastern Iron plans to move the project forward into the first stage of a Feasibility Study, including further resource drilling and initiating the permitting and approval process.
The company is considering a near term mining development producing 0.5 to 1 million tonnes per annum at +60% iron.
The plan would be to mine DSO hematite from Seven Mile first before mining magnetite/hematite from Five Mile.
Indicative CAPEX is low at $20 to $25 million, with total cash costs of $50 to $60 FOB.
Earlier this month, Eastern Iron announced a resource upgrade of 23% at the Five Mile Iron Deposit based on recent drilling results.
Five Mile now hosts a total resource of 11 million tonnes at 49.8% iron, with 6.8 million tonnes of that in the higher confidence Indicated category.
Previous results from a diamond drilling program, comprising four holes, at the Five Mile and Seven Mile deposits returned a highlight intercept of 71.4 metres at 46.3% iron from surface from a single hole at Seven Mile.
The Nowa Nowa project area is located 270 kilometres east of Melbourne and 220 kilometres by road south southwest of Eden port.
The project area is well serviced with respect to infrastructure including rail, sealed highways and several port options which are being investigated to determine the most appropriate export point.
Eastern Iron is investigating the potential to develop the iron deposits at Nowa Nowa primarily as a source of feed for steelmaking operations.
The deposits lend themselves to a number of potential development routes including DSO magnetite where untreated ore is exported with possibly further processing closer to the end user.
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