Atlas Iron’s capital raising falls short

Atlas Iron has fallen short of its $180 million target, raising just $86 million in capital funding.

The Pilbara miner launched the capital raising initiative in June for just 5 cents per share.

However the price of iron ore crashed during the fund raising efforts to record lows of $US44.60 per tonne.

Atlas is claiming the $86 million from existing shareholders, contractors and new investors as a win, despite the amount falling well short of the $180 million it had hoped for.

“This is an outstanding result for Atlas shareholders, for the 700 people who rely on Atlas for work and for the State and Federal Governments that use our royalties and taxes to provide essential services,” Atlas’ managing director David Flanagan said.

“This raising will strengthen our balance sheet considerably, giving us a measure of further protection against iron ore price volatility and enable the company to take advantage of opportunities as they arise.”

Atlas Iron was a high-profile victim of the iron ore collapse earlier this year after it closed its Pilbara mines and cut 600 jobs.

Since then, Atlas contractors have stepped in to help the company stay afloat, ushering in new profit-sharing agreements and cost-cutting measures which has seen the operations re-open.

Shares issued to its contractors is believed to have contributed $44 million of the $86 million raised.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.