Akora Resources launches capital raise for iron ore expansion in Madagascar

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By Colin Hay - 
Akora ASX AKO capital raising share placement

Akora Resources (ASX: AKO) has launched a capital raising to support further development of its Bekisopa iron ore project in Madagascar.

On the back of receiving strong backing from potential financiers for the project, Akora has unveiled a plan to raise $3.8 million through a placement and an entitlement offer.

Akora is looking to raise $0.8m through the placement of fully paid ordinary shares and $3m via a 1-for-5 pro-rata non-renounceable entitlement offer, also of fully paid ordinary shares.

The offer price of $0.15 per share represents: a 6.1% discount to the 10-day volume-weighted average price (VWAP) and a 7.4% discount to the 15-day VWAP.

Major shareholder support

Akora’s largest shareholder Futureworld Management has committed $1.5m to cornerstone the capital raising.

In announcing the transaction, Akora also revealed that two parties have submitted non-binding indicative offers with two more expected shortly, as it continues its strategic investor process in seeking a funding partner for the development of its projects.

The preferred parties have now been invited to participate in site visits to Madagascar in mid-May 2024 as a final due diligence workstream.

Funding structures

Managing director and chief executive officer Paul Bibby said a variety of funding structures, types and valuations have been proposed to date and all are receiving careful consideration by the board.

“It is pleasing to see the support that we have received for this equity raise from our largest shareholder Futureworld and we are hopeful and optimistic that our shareholders will follow suit,” he said.

“The strategic investor process has had eight companies doing due diligence, a great show of support for the quality of our Bekisopa project.”

“Two encouraging and constructive non-binding indicative offers were received on Friday 12 April, with potentially two more expected.”

Significant iron resource

The company’s flagship Bekisopa iron ore project has a 194.7 million tonne inferred JORC resource, highly valued due to its low impurities and the potential to produce a premium-priced 68%-plus iron concentrate.

Akora has developed a two-stage process for bringing Bekisopa iron to market, with stage 1 set to produce 62%-plus iron direct shipping ore (DSO) and stage 2 producing the premium-priced concentrate.

The company has already identified high-grade DSO at surface over an expansive area at Bekisopa and continues to add to that with exploration success.

Akora is also investigating the Satrokala iron ore project in Madagascar, where recent activities have identified a continuous 10km long magnetic strike feature.