[ferro-chrome.com] Western Desert Resources has secured the estimated $100 million in debt funding needed to complete the company's Roper Bar iron ore project in the Northern Territory, in an indication of how resurgent iron ore prices have reopened funding avenues for small resource companies.

South Australia-based Western Desert said it had secured the remaining funding needed for Roper Bar's $200m development via Macquarie Bank, clearing the way for first iron ore shipments from the mine within 90 days.

 

Western Desert managing director Norm Gardner told The Weekend Australian that he attributed the funding breakthrough to the recent improvement in iron ore prices."It took a while but we got good offers from two of the big banks in Australia," he said."If the price of iron ore was $100 (a tonne), it probably would have been difficult."To be realistic, even six months ago it would have been a lot tougher to get the money we needed." The benchmark price from iron ore has improved by 58 per cent in the past 12 months to about $US137 a tonne.

 

 

But the rise has been even more pronounced in Australian dollar terms due to the currency's recent weakness.

 

Australian-dollar prices are up 77 per cent over the past year to $150 a tonne, and have risen 31 per cent in the past three months alone.

 

The rise in iron ore prices, coupled with a similar dollar-driven resurgence in the gold price, has helped revive investor interest in the junior iron ore sector in recent months.

 

The ASX small-cap resources index, which tracks the performance of small Australian mining and exploration companies, had more than halved in value in the first six months of this year, but is up 31.7 per cent since late June.

 

Roper Bar is expected to produce about three million tonnes a year of iron ore, and will make Western Desert one of the few companies to join the ranks of Australia's iron ore miners in recent years.

 

While the details of the debt funding were not disclosed, The Weekend Australian understands the latest facility was for about $100m.

 

Western Desert last month secured an offtake agreement with the Singaporean trading house Noble Group, which included the provision of a credit facility towards the project's construction.

Shares in Western Desert gained 4c yesterday to close at 76c.