Madagascar-focused iron ore project developer Akora Resources has added to its Bekisopa development “war chest” with the successful conclusion of a capital raising.
The two-part raising consisted of a placement that brought in $801,000 and an entitlement offer for $3 million.
Managing director and chief executive officer Paul Bibby said shareholders had supported the company in a challenging equity market.
“This ensures the focused work programs are fully funded and allows continued progression across all projects,” he said.
“A major capital injection by Futureworld Management is welcomed.”
Iron ore rebound
The conclusion of the raising comes at a time when iron ore prices are rebounding, bolstered by recent support measures for China’s property sector.
Iron ore reached US$117.24 this week after the Chinese government announced initiatives to support its struggling property market, which in turn is expected to increase building activity and steel demand.
The turnaround in sentiment has seen companies like Akora attract renewed attention.
DSO fast-track plans
The company is looking to fast-track the proposed Bekisopa direct shipping ore (DSO) development after obtaining promising results from a scoping study for its high-grade asset.
The study estimated that the Bekisopa stage 1 project could supply up to 2 million tonnes per year of high-grade DSO.
In a ‘Low CapEx Case’, an open pit mining operation could produce up to 2Mtpa of DSO, with the scoping study finding that this could deliver an estimated initial five-year revenue of around $842m for operating costs of around $70 per wet metric tonne, weighted at the average over the initial five years.
The company immediately moved Bekisopa to the pre-feasibility study phase on the back of those results and also initiated a strategic investor process including providing open access to the Bekisopa project data room.
MRE update imminent
Akora is also planning to update the Bekisopa mineral resource estimate with the addition of new drilling results.
Recent drilling has highlighted the potential to significantly expand Akora’s iron ore options, with additional DSO tonnes expected to add mine life, improve project financials and increase cash flow.
Bekisopa currently hosts an inferred resource of 194.7Mt with the potential to produce a quality DSO product and a premium grade 67.6% iron concentrate suitable for direct reduced iron pellets for the steel industry’s accelerating decarbonisation.
