Akora Resources (ASX: AKO) has launched a $1.29 million capital raising at $0.10 per share to progress key logistics arrangements for its Bekisopa project in Madagascar.
These will include the completion of environmental and social impact assessments for the road haulage route and port at Bekisopa.
The funds will also allow the company to continue discussions with strategic partners for the high-grade direct shipping iron ore (DSO) operation.
Akora chief executive officer Paul Bibby said the company would now actively pursue the development of Bekisopa upon the release of a pre-feasibility study (PFS) this quarter.
The company said last month that early work on the PFS had highlighted the need for road upgrades to enable access from the Bekisopa mine to nearby port facilities.
The study identified Madagascar’s RN7 national highway as the preferred transport route to the coastal town of Toliara, where existing port infrastructure could potentially be utilised for the project.
Mr Bibby said the company would consider an option to incorporate the port into the PFS, which could result in potential capital cost savings during Bekisopa’s initial production ramp-up.
Akora is targeting first-stage DSO production from Bekisopa of up to 2 million tonnes per annum, with an average grade of 60% iron, for end-users in the blast furnace-basic oxygen furnace steelmakers market.
The company will aim to take advantage of direct reduced iron-electric arc furnace technology, used to make greener steel without coal and with considerably lower carbon emissions.
Akora expects five years of first-stage production will provide the cash flow needed to fund its multi-stage mining plans in Madagascar, incorporating its four high-grade iron ore projects.
The placement will consist of 12.93 million new shares issued at $0.10 per share to raise a total of $1.293m.
Both existing and new shareholders will be participating, including a member of the iron ore industry and the company’s first institutional investor.
Management and the Akora board of directors will also be subscribing, subject to shareholder approval.
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