Indo Mines raises $5.4m to finance Java iron mine development

ASX-listed firm Indo Mines Limited announced on Thursday that it has undertaken a strategic placement of 20 million shares at an issue price of A$0.27 a share to Rockcheck Steel Beijing Co. Ltd.

After the placement, Rockcheck will become one of Indo Mines? largest shareholders with a 10% stake in the Company.

Funds raised from the placement will be used to provide working capital and allow the Company to expedite the commencement of production of commercial volumes of iron concentrate from the Jogjakarta Iron Project in Central Java.

Operations will begin in the first half of 2011 targeting production of up to 250,000 tonnes.

Rockcheck is one of the largest privately owned iron and steel producers in China with an annual iron making capacity of 5 million tonnes and is centered in Tianjin.

Rockcheck was one of the first steel companies in China to introduce direct reduction iron making technology and now operates the world?s largest rotary hearth furnace, a process that can utilise up to 100% iron concentrate produced from iron sand.

Indo Mines is currently assessing the potential to produce 2 million tonnes of iron concentrate per year from its Jogjakarta Iron Project and is targeting commencement of full scale operations in June 2012. There is also further potential to produce 1 million tonnes of pig iron per year at a later date.

The placement to Rockcheck is not tied to any off-take arrangements for product from the Jogjakarta Iron Project however discussions around future off-take arrangements are anticipated. Rockcheck?s involvement will also assist with Indo Mines gaining access to Chinese equipment suppliers which could have a positive impact on the cost of developing the Jogjakarta Iron Project.(alex)