Magnetite Mines (ASX:MGT) said it will receive up to $7 million in funding through unsecured Convertible Notes from US-based fund manager C/M Capital Partners.
The initial funding of $2.5 million comprises a first tranche of $1.2 million and a second tranche of $1.3 million, subject to shareholder approval.
Additional funding of up to $4.5 million may be available, contingent on mutual agreement and necessary approvals.
The secured funds will be utilised to lodge the Razorback Mining Lease Proposal with the South Australian Government and for general working capital requirements.
This move complements recently declared overhead cost reductions and positions the company to advance its strategic objectives.
"We are very pleased to have secured C/M Capital Partners as our funding partner at this pivotal time in the development of our flagship Razorback Iron Ore Project," stated Tim Dobson, Managing Director of Magnetite Mines.
"We see a significant value disconnect between Magnetite Mines’ current market valuation and the strategic potential of their multi-decade asset," added Jonathan Juchno, Managing Partner of C/M Capital Partners.
An extraordinary general meeting will be convened to seek shareholder approval for the second tranche of convertible notes and issuance of options related to the funding arrangement.
Magnetite Mines is an iron ore company focused on the development of magnetite iron ore resources in the highly prospective Braemar iron region of South Australia.
At the time of reporting, Magnetite Mines' share price was $0.12.