The Magnetite Mines Ltd (ASX: MGT) share price has had a roaring 2021 so far. It's currently up 330% year to date.
At the time of writing, the Magnetite Mines share price is up 2.38% from yesterday's closing price, trading for 4.3 cents.
So, what's been driving the Magnetite Mines share price? Let's take a look at its recent time on the ASX.
The build-up to the Magnetite Mines share price's big bang
Magnetite's share price rise has come after much adjusting by the company, and a new foray into iron ore mining.
The company purchased its Razorback High Grade Iron Ore Project in 2018, but in June last year it signed a farm-in agreement with Braemar Mining Developments. In return for funding the project, as well as committing to future funding, Braemar could receive up to a 49.9% interest in Razorback.
This led to the Magnetite Mines closing share price closing above 1 cent in August, the first time it had done so since 2018.
Then, in September, Magnetite Mines began a renounceable rights issue for its shareholders.
A renounceable rights issue is when a company offers its shareholders the option to buy new shares, normally for a discounted price.
In this instance, the shares were offered to share holders at 1 cent apiece. Magnetite Mines also offered a bonus option free with every 2 shares purchased. The bonus option had an exercise price of 5 cents.
The oversubscribed issue ultimately raised $5.95 million for the company.
The company's chair, Peter Schubert, said in its first quarter report that the activities were pivotal for the company.
With the support of new and existing shareholders, we have substantially increased our market capitalisation, capital position, market awareness for the Razorback Iron Project and importantly our plans for its development. The successful scoping study last year set the Company on a path to becoming an iron ore producer. We are now advancing along that path by undertaking a well thought out study that will deliver an optimised scope for project development and confirm the positive economics of the staged development pathway. We are assembling an experienced and talented team of experts to ensure we can deliver efficient and effective results in a timely fashion.
Finally, in October Magnetite Mines announced revenue from a 2007 royalty agreement between it and Silverlake Resources Limited (ASX: SLR) is expected to commence in the second half of this year.
The agreement is for the Rothsay gold operation, owned by Silver Lake. Under the agreement, Magnetite Mines is entitled to a royalty of $10 per ounce of gold extracted from Rothsay, beginning once Silver Lake has sold 10,000 ounces. The royalty will end after the total payments reach $595,000.
Magnetite Mines share price snapshot
2021 has seen the Magnetite Mines share price rise by 330%, despite little news out of the company since December. In the past 12 months, Magnetite shares are up a whopping 2,100%
On current prices, the company has a market capitalisation of around $120 million, with approximately 2.8 billion shares outstanding.
