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Strike Resources places $103m shares with Gallagher Holdings

Elisabeth Behrmann, Dow Jones Newswires | July 28, 2008

STRIKE Resources has raised $103 million through a share placement to Gallagher Holdings to help fund its Peruvian iron ore project.

The Perth-based company said it placed the shares at an issue price of $2.75, a 39 per cent premium to Strike's (ASX: SRK) closing price Thursday.

Gallagher is an unlisted holding company of Russia's resource player Metalloinvest Holding, and Gallagher chairman Farhad Moshiri will join Strike's board as a non-executive director after completion of tranche one of the placement.

The funds will go toward development of Strike’s flagship 20 million metric tonne per annum iron ore project in Peru.

Strike recently announced the completion of a year-long pre-feasibility study. The placement means Strike will be able to move to a bankable feasibility study.

The placement will be made in two tranches, one of $49.7 million and $53.4 million.

The first tranche will proceed shortly, with completion of the second tranche subject to shareholder approval, Foreign Investment Review Board approval and completion of due diligence by Gallagher.

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