The placement to undisclosed institutional and sophisticated investors totals $15.9 million, while the $36.5 million entitlement issue is to be underwritten by Perth broker Argonaut, and sub-underwritten by significant Metro shareholder Balanced Property – the latter a firm Metro claims has “proven track record of identifying, developing and operating bulk commodity projects in Queensland.

The new shares are priced at 12.5c, with Metro’s shares trading at 5c 12 months ago and more recently reaching a high of 17c.

Debt was incurred by Metro last year as bridge funding for its takeover of Gulf Alumina.

The Gulf takeover was predicated on its bauxite resources being adjacent to Metro’s Bauxite Hills resources in the Weipa bauxite region of Queensland.

A feasibility study for a DSO development is due to be completed in the coming weeks.

Further funding will be needed to build the project – with construction flagged to begin next quarter – with capex estimates previously put at circa $40 million for a development about 20% smaller than that now being considered.

The average annual earnings of that previously assessed development were put at $133 million.

Prior to the current raising, Metro shares were trading at 15.5c, capitalising the company at $90.6 million.