Shares in Cazaly Resources rose after the junior gold and iron ore explorer announced it would raise up to $4 million through an unidentified Chinese company.
The company said in a statement today it planned to place 10 million shares at 40 cents a share to "a private company based in southern China".
The Chinese investor would also be issued with five million unlisted options exercisable at 48 cents each, expiring two years from issue.
"It is a large privately-owned company with over $100 million in annual revenue," Cazaly said.
"It supplies to major manufacturers, which use extensive steel products and other inputs.
"The company has close commercial relationships with several mid-to-large sized steel mills in China."
Cazaly on Wednesday announced it had $3.8 million in cash and cash equivalents at the end of June, saying this was "sufficient capital to effectively explore its current landholdings".
The company said on Thursday the funds raised under the $4 million placement would be used mainly to advance its Parker Range iron ore project in Western Australia.
The company reported a loss for 2008/09 of $5.29 million, compared to a net profit of $1.53 million in the previous financial year.
Source: Perth Now
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