Trafford Resources Ltd said on Thursday that it plans to issue new renounceable shares amounting to $3.75 million in order to fast track its iron ore project in South Australia.

The company said that the shares sale would fund initial work programs and the finalisation of the feasibility study for the first stage of the Wilcherry Hill iron ore project.

Trafford informed the stock exchange that "stage one of the project is being fast tracked into production to begin supplying high quality, low contaminant direct shipping or to the Chinese steel industry by the end of this year."

The company maintains 50 percent ownership of IronClad Mining Ltd, which operates the Wilcherry Hill joint project. It also holds 20 percent of direct interest in the joint venture.

Trafford said that under the rights issue, shareholders would be offered one new share for 50 cents for every ten shares they would buy and subscribing shareholders would receive one free option for every two shares and each option could be exercised at 70 cents any time within a two-year period.

The sale is poised to increase the company's stake in Wilcherry Hill and should increase its ownership of the iron ore project to 60 percent.

Trafford said that the arrangement would also allow "shareholders additional exposure to all other Trafford projects, including any gold won from Wilcherry Hill and to the increasingly promising Telephone Dam lead-zinc-silver project."

As of 1017 AEST, Trafford shares were trading at 52 cents while IronClad shares trade at $1.045, declining a bit by 0.5 cents.