Wednesday, 27 July 2011

Richmond Mining in pre-open pending capital raising announcement

Richmond Mining (ASX: RHM) has been granted a trading halt by the ASX pending a capital raising announcement, with the company's shares currently in pre-open.

Richmond has not yet indicated where the potential inflow of funds would be allocated.
The company's main focus is on the Buena Vista iron project in Nevada, U.S., which was recently acquired.

A recent Feasibility Study at the West Deposit provided some highly positive results for the company, which included:

- Capital cost of US$161 million;
- IRR of 41% (using a conservative average FOB concentrate price for the initial 10 years of US$110);
- Average annual high grade iron ore concentrate production of 1.75 million wet metric tonnes grading 67.5% total iron, with very low impurities over an initial 10 year mine life;
- Free after tax cash flow of US$476 million from the first 10 years of operations; and
- First concentrate delivery targeted for December quarter 2012.

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