The Conversation (0)
Cyclone Metals Limited (ASX: CLE) (Cyclone or the Company) is pleased to announce it has received an investment of $1.32 million cash via the issue of secured notes brokered by CPS Capital Group Pty Ltd (Convertible Note) to fund its flagship Block 103 Iron Ore Project (Block 103) and the Company’s general working capital requirements.
Highlights
- $1.32 million cash investment after expenses received via secured notes issued to CPS Capital Group Pty Ltd (Note Holder);
- The notes are expected to be non-dilutive for Cyclone shareholders as they leverage securities held by Cyclone in European Lithium Limited (ASX:EUR)
- 1.34 million secured notes issued with a face value of $1.25, repayable in EUR shares at a 5% discount to the EUR VWAP share price1.
- Cyclone owns 62.8m EUR shares valued at $4.96 million as of 13/11/23. 55m EUR shares will be used as security.
- The timing of the note repayment is at the discretion of the Note Holder after a non- repayment period of 90 days, with a maturity of 12 months.
The notes carry a face value of $1.25 and are repayable in EUR securities at the discretion of the Note Holder after a 90 days standstill period. With the exception of the options, the notes should be non- dilutive to Cyclone Shareholders2.
Cyclone Executive Director and CEO, Paul Berend, said: “These notes provide us the oxygen to hit some major operational targets for project Block 103; whilst not diluting our Cyclone shareholders. They are a smart way to leverage our EUR shares; assuming that the merger between EUR and Sizzle Acquisition Corp and the subsequent NASDAQ listing is completed during the 3-month standstill period. If this happens, and if the future EUR share price reflects the current NASDAQ valuation, our Cyclone shareholders would benefit from a higher share price of EUR shares. This is a nice potential upside which explains the structure of the notes but is speculative. The most important takeaway is that we have secured the funding to achieve key operational milestones for Block 103, which could drive substantial value uplift for our shareholders.”
Click here for the full ASX Release
This article includes content from Cyclone Metals Ltd., licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
CLE:AU
Types of Iron Ore: Hematite vs. Magnetite
What is hematite ore?
Hematite ore, also called direct-shipping ore, has naturally high iron content suitable for steelmaking. Because of its high iron content, hematite ore must undergo only a simple crushing, screening and blending process before being shipped off for steel production. For that reason, hematite ore is important for many mining companies.
Hematite ore is found throughout the world, with major production hotspots being Australia, Brazil, China and India.
In Australia, hematite has been the primary type of iron ore mined since the early 1960s. Nearly all of Australia's iron ore exports are high-grade hematite ore, and the majority of its reserves are located in the Hamersley mountain range of Western Australia because the range sits on a banded iron formation.
BHP (ASX:BHP,LSE:BHP,NYSE:BHP) is Australia’s leading iron ore producer and has several mining and processing hubs in Western Australia. Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) is also a major iron ore producer in the country, especially in the Pilbara region. One of its key iron producing operations is the Hope Downs iron ore complex, a 50/50 joint venture with Gina Rinehart's Hancock Prospecting.
Brazil is another of the world’s main sources of hematite ore. The country's Carajás mine, operated by major miner Vale (NYSE:VALE), is the largest iron ore mine in existence. Vale consistently ranks among the world's five largest mining companies and is the world's biggest producer of iron ore pellets. Its primary iron ore assets are in the Iron Quadrangle region of Brazil's Minas Gerais state.
A great deal of hematite ore is also mined in China. Known reserves include the Tung-Yeh-Chen and Dongye hematite ore deposits.
What is magnetite ore?
Mishainik / Adobe Stock
The mineral magnetite is a highly magnetic mineral found in solid and crystal forms. Magnetite actually has higher iron content than hematite. However, while hematite ore generally contains large concentrations of hematite, magnetite ore tends to hold low concentrations of the mineral magnetite. As a result, this type of iron ore ore must be concentrated before it can be used to produce steel. Magnetite ore’s magnetic properties are helpful during this process.
Magnetite ore may require more treatment than hematite ore, but end products made from magnetite ore are typically of higher quality than those made from hematite ore. That’s because magnetite ore has fewer impurities than hematite ore; in this way, the elevated cost of processing it can be balanced out.
Magnetite ore is currently mined in Minnesota and Michigan in the US, as well as in taconite deposits in Eastern Canada. A major mining site in Michigan is the Marquette Range, which hosts four types of iron ore deposits, including both magnetite and hematite ore.
In Minnesota, magnetite ore is mined mainly in the Mesabi Range, one of the four ranges that make up the state's Iron Range. Cleveland-Cliffs (NYSE:CLF) is a major player in the magnetite ore industry and the largest iron ore pellet producer in North America. Its Hibbing Taconite joint venture in Minnesota’s Mesabi Range has an annual capacity of around 7 million metric tons of magnetite ore.
In Canada, many mining companies focus on exploration and development in the iron-rich Labrador Trough, which runs through parts of the provinces of Québec and Newfoundland and Labrador.
This is an updated version of an article first published by the Investing News Network in 2013.
Don’t forget to follow us @INN_Resource for real-time news updates.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
