Special Report: Magnetite Mines has received a resounding vote of confidence from its shareholders after its $5.65m rights issue closed significantly oversubscribed.

A further $300,000 was placed to lead manager Mahe Capital in lieu of cash fees payable under the underwriting agreement, taking the total raised to $5.95m.

Magnetite Mines (ASX:MGT) executive chairman Peter Schubert says the result is a strong endorsement by both existing shareholders and new investors of the company and its 4 billion tonne Razorback iron ore mine in South Australia.

“In the last three months, despite an uncertain global situation, we have seen a substantial re-rating of the company’s market capitalisation and, with this successful rights issue, the next part of the company’s exciting study program is fully funded,” he said.

Schubert added that the fundraising was a critical step on the company’s journey of becoming an iron ore producer by developing high-grade products out of South Australia and unlocking the potential of the Braemar – the birthplace of Australia’s iron ore industry.

Under the rights issue, eligible shareholders were offered one new MGT share priced at 1c, or a 27 per cent discount to the 10-day volume weighted average price at that time, for every four shares held.

This was partially underwritten by Mahe to $4m, though just $1.9m of this capacity was used.

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