Raisebook

Transitioning from an Explorer to a Revenue Generating Iron Ore Producer
Macarthur Minerals Limited
Macarthur Minerals Limited
ASX:MIO
  • Macarthur Minerals is targeting the premium Iron Ore market, aiming to differentiate itself as a producer that does not compete in the heavily discounted -60% Fe market, which is dominated by larger producers in WA.
  • Substantial Mineral Resources have been delineated at the company’s flagship Lake Giles Iron Project.
  • Lake Giles is at an advanced stage of development, with approximately $62M spent to date on exploration, metallurgy, feasibility studies and environmental planning.
  • The company is targeting commencement of commercial mining operations at Lake Giles by Q1 2023.
  • The Company has entered into a binding offtake agreement with Glencore International A.G. for the marketing of the Company’s Iron Ore product for up to 4 million wet metric tonnes (WMT) per annum.
  • In July 2019, the Company closed a fully subscribed private placement for USD$6M of Convertible Notes to pursue activities for the development of Lake Giles. Glencore International AG participated in that placement, investing USD $2M, underscoring its commitment to arrangements under the binding Glencore Offtake Agreement.
  • Macarthur Minerals currently listed on the TSX-V (symbol MMS) with a market cap of approx. $CDN 16.1M.
  • Enterprise Value on Completion of the offer of ~ $24M AUD.
Raise Amount
$5,000,000
Offer Price
$0.2500
Closes
Nov 13, 2019

TSX listed MacArthur Minerals (TSX: MMS) is seeking an ASX dual listing under the proposed ticker (ASX: MIO).

The Company’s primary objective is to transition from an exploration company to a producer of high quality Magnetite Iron Ore concentrate for the export market.

The Company has a target of commencement of commercial mining operations at its Lake Giles Iron Project by Q1 2023.

The Company’s planned development pathway targeting the premium Iron Ore market will aim to differentiate it as a producer that does not compete in the heavily discounted -60% Fe market, which is dominated by larger producers in Western Australia

The Lake Giles Iron Project is comprised of the Moonshine Magnetite Project and the Ularring Hematite Project, located in the Yilgarn Region of Western Australia.

The region is a well-established mining district with one existing Iron Ore producer and several projects in the exploration and development stages.

The region is well serviced with infrastructure including open access rail and Iron Ore export facilities at the Port of Esperance.

The Lakes Giles Iron Project is at an advanced stage of development with approximately $62 million expended on exploration, metallurgy, feasibility studies and environmental permitting to date.

Substantial Mineral Resources have been delineated and include an Inferred Mineral Resource of 1,316 Mt @ 30.1% Fe for the Moonshine Magnetite Project, in addition to an Indicated Mineral Resource of 54.5 Mt @ 47.2% Fe and an Inferred Mineral Resource of 26.0 Mt @ 45.5% Fe for the Ularring Hematite Project.

The Company has already obtained environmental approval to develop the Ularring Hematite Project and intends to commence the approval process for the Moonshine Magnetite Project. The Company is not presently aware of any environmental restrictions that would materially restrict or prevent the approval of the Moonshine Magnetite Project.

In 2019 the Company completed a Preliminary Economic Assessment for a combined Magnetite and Hematite operation in respect of the Lake Giles Iron Ore Project (PEA).

The results of the PEA are positive and support the Company’s strategy of progressing to a Bankable Feasibility Study for the Lake Giles Iron Project, with the objective of transitioning from an exploration company to a producer of high quality Magnetite Iron Ore concentrate for the export market.

Development Pathway Advancing:

In March 2019, the Company entered into a binding offtake agreement with Glencore International A.G. for the marketing of the Company’s Iron Ore product for up to 4 million wet metric tonnes (WMT) per annum.

On 10 July 2019, the Company closed a fully subscribed non-brokered private placement for USD$6,000,000 of Convertible Notes (on conditional acceptance with attaching Warrants offered for one fourth of the commitment amount) to pursue activities for the development of the Lake Giles Iron Project.

Glencore International AG participated in that placement, investing USD $2,000,000, underscoring its commitment to arrangements under the binding Glencore Offtake Agreement. As at the Prospectus Date, USD$4,950,000 of Convertible Notes have been issued.

The Offer

Macarthur Minerals Ltd (ACN 103 011 436) is offering 20 million shares in the Company (on a post consolidation basis), at an offer price of $0.25 per share to raise a minimum of $5,000,000 with the ability to accept oversubscriptions of up to a further 10 million Shares to raise a maximum of $7,500,000.

The offer of the securities are made in, or accompanied by, a copy of the Disclosure Document which can be obtained by clicking on the "ACCESS DISCLOSURE DOCUMENT" button on this page.

Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the Disclosure Document.

Before making an investment decision, potential investors should read the Disclosure Documents entirely, and seek professional financial advice.

Investors should be aware that there are risks associated with an investment in this Company.

No assurance can be given that the Company will achieve commercial viability through the exploration or development of its Projects and/or treatment of any deposits.

A complete set of risks associated with an investment in the Company is included in Section 8 of the Disclosure Document.

Capital Structure

Key Offer Information Minimum Subscription Maximum Subscription
Offer Price per Share $0.25 $0.25
Gross proceeds under the Offer
(before costs and expenses)
$5,000,000 $7,500,000
Total number of Shares available
under the Offer
20,000,000 30,000,000
Existing Restricted Share Units 4,813,971 4,813,971
Existing Employee and Consultant
Share Options
4,730,000 4,730,000
Lead Manager Options 500,000 500,000
Existing Convertible Notes 495
(convert into 9,166,667 Shares)
495
(convert into 9,166,667 Shares)
Existing Convertible Note Warrants 16,249,063
(convert into 4,062,266 Shares)
16,249,063
(convert into 4,062,266 Shares)
Existing Warrants (excluding
Convertible Note Warrants)
21,675,913 21,675,913
Total Shares on issue on
completion of Offer (undiluted)
100,508,406 110,508,406
Total Shares on issue on
completion of Offer (fully diluted)
145,457,222 155,457,222
Indicative market capitalisation on
completion of Offer (undiluted)
$25,127,102 $27,627,102
Indicative market capitalisation on
completion of Offer (fully diluted)
$36,364,305.60 $38,864,305.60

Indicative Timetable

Please note the below dates are indicative only and may vary subject to the Corporations Act, the Listing Rules, and other applicable laws.

In particular, the Company, in consultation with the Lead Manager and Corporate Advisor, reserves the right to vary the Offer Opening Date and Closing Date without prior notice, which may have a consequential effect on the other dates.

Furthermore, dates are dependent upon completion, and as such, satisfaction of the Conditions to the Offer.

Applicants are therefore encouraged to lodge their application form as soon as possible after the Offer Opening Date.

Event Date
General Meeting of the Company 31 October 2019
Consolidation Commences 1 November 2019
Offer Closing Date 28 November 2019
Consolidation Completes 28 November 2019
Issue of Shares under the Offer 2 December 2019
Despatch of holding statements 4 December 2019
Expected date for commencement of trading of Shares on ASX 6 December 2019

Indicative timeline to commencement of commercial operations for Lake Giles iron project:

Use of Funds

Estimated Use of Funds All figures are $

Minimum Subscription

%

Maximum Subscription

%
Bankable Feasibility Study of Lake Giles Iron Projects 3,800,000 76% 5,600,000 75%
Mt Jackson Iron Project Exploration 100,000 2% 300,000 4%
Nevada Lithium Project Exploration 100,000 2% 100,000 1%
Working Capital/Corporate Administration 500,000 10% 850,000 11%
Lead Manager and Corporate Advisor Offer Fees 500,000 10% 650,000 9%
Allocation of Offer Proceeds excluding Lead Manager and Corporate Advisor Fees 4,500,000 90% 6,850,000 91%
TOTAL 5,000,000 100% 7,500,000 100%
This deal closed on November 13, 2019