Hawsons said the funding package was secured at low cost and substantially reduced project financing risk. Its shares jumped about 20 per cent on Wednesday morning on the news.

Hawsons executive chairman Bryan Granzien said LDA Capital’s support provided the company with a flexible and non-restrictive source of equity capital.

“This is a major milestone for the company,” Granzien said.

“LDA Capital’s support is a recognition of the quality of the Hawsons’ iron ore body, its commercial potential, and strategic value within the emerging green steel supply chain, as evidenced by the pricing of the associated options package.” 

“It is a strong signal to capital markets that we have a credible global funding option in place to assist the development of our world-class Hawsons Iron Project. 

He said the funding package provided HIO with access to equity funds, if required. 

“This provides enhanced certainty and the ability to deal with, among other things, any potential unforeseen events during project development,” Granzien said. 

“Importantly, HIO has total control over the quantum and timing of any drawdowns under this four-year agreement.

“To have this piece of the capital stack in place is an outstanding achievement for HIO and it, together with our current cash at bank, puts HIO in a very strong position in the short, medium, and longer-term.

The deal comprised 2 per cent facility fee totalling $4 million which was payable within 12 months.

Hawsons has also agreed to issue up to 71.5 million unlisted options to LDA Capital. 

A bankable feasibility study for the project had been started and was expected in December 2022.