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Positive signs for Carpentaria

Wednesday, 8th January, 2014

By Andrew Robertson

Carpentaria Explor-ation says the pace of future spending at the Hawsons iron project will largely depend on securing further investment.

The explorer yesterday said it was pleased with the outcome of a recent capital raising which netted $1.8 million and would be used to help meet development cost requirements for the project.

Carpentaria had stood to secure up to $3.6 million from the capital raising, which targeted both existing shareholders and new investors.

About $1.3m worth of shares were sold to sophisticated and institutional investors under a placement announced in October. 

Almost $500,000 more was generated from a rights issue to existing shareholders, who were offered one new share for every eight held.

“This outcome was pleasing given recent equity market conditions and we welcome the new shareholders to our company,” the company said.

It said the funds would also allow Carpentaria to consider “other strategic and operational opportunities” related to the project which is located 60km southwest of Broken Hill.

Carpentaria has a 60 per cent stake in Hawsons, which has an inferred resource of 1.4 billion tonnes, in a joint venture with Pure Metals, which is now managing the project.

“Pure Metals is currently funding $5 million (to progress the project) until May this year and the project is progressing well with positive results so far from the water bore exploration work helping to de-risk the project,” Carpentaria said. 

“Carpentaria is now well placed to maintain the project momentum; however the pace of future spending at Hawsons will be subject to joint venture plans and the ability to attract further investment.”

Managing director Quentin Hill told the BDT in October that the joint venture partners were looking to attract another investor to progress the project to the next stage, a bankable feasibility study, and beyond.

At the same time the company announced plans to halve the size of the project in response to “tightened capital markets”.

Mr Hill said reducing the $3 billion capital cost of the project would make it more attractive to potential investors.

Yesterday the company said: “Carpentaria continues to attract and pursue interest from a number of potential development partners for the Hawsons project, including from Asia and elsewhere.

“The project’s established infrastructure and low forecast costs make it highly attractive compared to competing iron ore projects, and given the continued high iron prices, the Hawsons joint venture partners are confident of attracting a major development partner to this important project near Broken Hill.

“Importantly, Carpentaria has an excellent cash position to exploit its valuable portfolio of iron ore, gold and other resource projects across eastern Australia.”

Resources analyst Gavin Wendt said the fact the company did not raise more money from its recent capital raising was not surprising.  

“Some companies are only raising ten per cent of what they could potentially raise ... so these guys have probably done very well compared to a lot of companies,” he said.

“But I think it’s to do with the fact they’ve got a more advanced project; it’s not an exploration project.

“They’ve got a resource together and they’re trying to get it to production stage.” 

Carpentaria Exploration managing director Quentin Hill.

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