"Nevada Iron's (ASX: NVI) impressive recent results from the Buena Vista Iron Project in Nevada have not been lost on the market - with the company attracting sophisticated Canadian, European and Australian investors to a private placement which raised $1.15 million.
The placement comprised nearly 6.8 million shares at $0.17, and is conditional upon the receipt of shareholder approval at a General Meeting scheduled for early October.
Funds will advance the expanded Buena Vista Iron Project, where further drilling results just last week continue to confirm the extension of near surface higher grade magnetite mineralisation along the Section 5 magnetic anomaly.
A highlight was 67 metres at 28.3% total iron from 17 metres, which follows on from previous results in the same line of drilling which returned 35 metres at 30.2% total iron from 23 metres.
Importantly - section 5 is shaping up to be a major deposit, with initial indications from recent drilling suggesting the mineralisation is much larger than the defined exploration target of 12 to 18 million tonnes at 18 to 26% total iron.
As a potential early starter pit, it is ideally located around 1 kilometre from the proposed plant site and is one of several magnetic anomalies in the immediate plant area.
Worth noting is that Buena Vista ore has proven to be significantly different to other magnetite mineralisation. The iron readily upgrades without the need for expensive fine grinding like a banded iron formation magnetite, to produce a high quality clean concentrate grading 67.5% to 69% iron at lower cost.
Another plus for the project is that it is strategically located close to established infrastructure which reduces the development costs and shortens the time taken to get the project into production.
Inclusive to the many advantages inherent in Buena Vista are the low capital cost, the low risk political environment, the cash costs which are equivalent to or better than the majority of emerging magnetite producers and the relatively short time to production.
The project also represents a much lower operational risk than most emerging producers because of the proposed scale of production.
Toronto Stock Exchange listing
The funds will also facilitate the listing of the company’s securities on the Toronto Stock Exchange.
Final part of the placement
As part of the placement and subject to the receipt of shareholder approval, Nevada has agreed to grant to parties who assisted with the placement 406,905 options with an exercise price of $0.17 - expiring two years from their date of grant."
As Always DYOR
NVI Price at posting:
90.0¢ Sentiment: LT Buy Disclosure: Held
