PERTH (miningweekly.com) – ASX-listed Condor Blanco Mines was looking to raise nearly A$18-million in financing to fund its Marianas iron project, in Chile, and to acquire a coal project in South Africa.

The company said on Monday that it would place about 83-million shares, at A$0.008 a share, to a fund backed by a boutique UK mining investment consultancy. The stock would be distributed to the global investment market and was expected to raise about A$2-million.

Condor had also applied for debt financing of up to €10-million to be borrowed from a European financial institution, with bank bonds of the same value being provided as security to the lender. The bonds have been secured against the upcoming cash flow expected from the Marianas iron-ore project.

The funds from the debt facility would be used to bring the Marianas project to operation, either solely or as a joint venture with Lacerta Finance and Mining Spa, and to fund the South African coal acquisition.

“As Condor moves focus to highly prospective and near-term assets, we have had to leverage our near-production asset Marianas and access the debt market. This means we can concentrate on high-quality tenements where there is a clear sight to production or sale to a major in the next two years,” said Condor chairperson Paul Crosio.

He added that the Marianas project had allowed Condor to use the prospective cash flow from the project to access the European debt market, rather than returning to the equity markets.

Condor on Monday announced that it had signed a heads of agreement with Hong Kong-based Signet Coking Coal to acquire a 50.3% interest in The Duel and Tshipise 2 projects, in South Africa.

Under the terms of the agreement, Condor would invest about A$5-million in Signet to gain an initial 24.4% shareholding in the project. The funds would be used to undertake a drill-out of The Duel project.

Condor would gain a stake in the Tshipise 2 project following the drill-out programme, and once a Joint Ore Reserves Committee-compliant resource of at least 30-million tonnes was delivered at The Duel.

“Condor continues to focus on high quality assets, but the board felt that restricting our geographic coverage to Chile has left Condor exposed to unacceptable sovereign risk,” said Crosio.

“We have actively sought to diversify the risk and have identified a suitable project in South Africa, which is on track to prove a significant hard coking coal resource in 2014. As we move from heads of agreement, we will continue extensive due diligence in the asset but, at this stage, independent review has encouraged us to move forward on this joint venture.”

The acquisition would be subject to a number of conditions, including a 60-day technical due diligence and shareholder approval.