Legacy to raise $11.7m

Legacy Iron Ore has received commitments to raise $11.74 million through a four-for-one rights issue, primarily to accelerate production at the Mt Celia gold project in Western Australia.

The company said it would use the proceeds to undertake all initial test work and resource studies to expand the current resource estimate of the project and position the company to commence mining.

It said funds would also be used to advance the Mt Bevan gold project, about 100 kilometres west of Leonora, and the base metals and tungsten projects.

The offer price is 0.2 cents per share, with Legacy major shareholder NMDC (which holds about a 78 per cent stake in the company) committing to take up its full entitlement under the offer to raise around $9.2 million.

Legacy said if the offer is fully subscribed, the number of shares issued by the company will increase from around 1.5 million to 7.3 million shares.

Ventnor Securities is acting as corporate advisor to the capital raising.

Legacy Iron Ore chief executive Rakesh Gupta said in an announcement yesterday the company would be well positioned to advance the development of the Mt Celia project, following completion of the offer.

He also said pit optimisation studies have shown the project has potential to provide early cash flow.

The company is currently in a trading halt, which it requested on November 29.