Highlights

  • Macarthur agreed to a secured Loan Facility of up to AUD 1mn to support working capital.
  • An initial AUD 600,000 advance is conditional, with a further AUD 400,000 available by agreement.
  • The six-month facility bears 14% annual interest and includes the proposed issue of unlisted options.
  • Lake Giles work includes planning bulk sampling at the Ularring Hematite Project.

Macarthur Minerals Limited (ASX:MIO) has arranged a secured loan facility aimed at sustaining work on its Lake Giles Iron Project in Western Australia. The financing is intended to provide near-term Working Capital as the company develops plans for bulk sampling and further evaluation of hematite material at Ularring.

The Facility and Its Funding Stages

Macarthur entered into a loan agreement with Whitehall Capital Holdings for up to AUD 1mn. The facility provides for an initial AUD 600,000 advance after relevant conditions are met or waived. An additional AUD 400,000 can be made available by mutual written agreement. The stated loan term is six months from the initial advance date, with interest charged at 14% annually. Interest of AUD 42,000 on the initial advance, together with agreed fees and costs, will be deducted upfront. The loan is secured under a general security deed.

Options Form Part of the Arrangement

Macarthur intends to issue five million unlisted options, divided equally between facility Options for the lender or nominees and broker options for GBA Capital or nominees. The exercise price is set at 200% of Macarthur’s closing ASX share price on the trading day immediately preceding the initial advance. That represents a 100% premium to the reference price. The options would expire three years after issue and remain subject to applicable listing-rule and legal requirements.

Lake Giles Moves Toward Bulk Sampling

The working capital is intended to support ongoing Lake Giles activities, including preparation for a proposed bulk sampling program at the Ularring Hematite Project. Macarthur is working with Gold Valley Yilgarn and Destec Contracting following previously announced program-of-work approvals. Destec has been reviewing block models to identify sampling areas. The work is intended to assess hematite quality, crushing and beneficiation requirements, and potential blending with iron ore from the Wiluna West project.

Operational Planning Remains Underway

Planning also covers the Mining equipment and mobile crushing plant that would be required for bulk sampling. Actual timing depends on final operating arrangements, land access and any additional approvals. The proposed sampling is therefore a step in materials evaluation, not an announcement that mining or commercial production has begun. Macarthur also continues to pursue opportunities linked to its Moonshine Magnetite Project.

The Next Steps for the Project

Key near-term matters include satisfying the loan conditions, arranging the planned bulk sampling operation and completing associated logistical work. The company has chosen Debt funding at this stage rather than an immediate Equity raising at prevailing prices. Whether the facility reaches its full limit and when sampling starts will depend on the conditions outlined in the financing and project plans.