Iron ore miner Aricom kicked off a three-day roadshow in London on Wednesday to raise as much as $1 billion to develop its K&S and Garinskoye deposits in Russia, despite warnings that the liquidity crisis had dampened investor interest.

The company's shares fell as much as 38 percent on the London Stock Exchange but later recovered some of the losses to close down 13.2 percent.

"Investors are scared because most of Aricom's projects so far are on the drawing board," said Nikolai Sosnovsky, a metals analyst at UralSib. "The market is so jittery at the moment that few are prepared to put their money in projects with an uncertain future."

The company is raising funds to finance the sprawling Kimkan Processing Plant in the far eastern Jewish autonomous region. The plant, which is expected to be fully operational in 2015, should churn out 6 million tons of iron ore concentrates and 4 million tons of ferrous metal annually, according to the company's web site.

"All company executives are away for the roadshow announced by our CEO," said a woman at Aricom's office in London, declining to give her name.

Aricom's Moscow office said its director, Yury Makarov, was also in London to attend the roadshow.

"We are confident of securing funding but may have a bigger syndicate of banks taking on the loan,'' Aricom chief executive Jay Hambro told Bloomberg. "We are looking at a number of options, including a possible strategic partnership.''

But as shares of metals companies tumbled in stock markets around the world, analysts expressed doubt that Aricom would succeed in finding investors.

"This is not an opportune time for Aricom to raise money for new projects," said Marat Gabitov, an analyst at UniCredit Aton. "With demand for steel in the construction and automobile industries at record lows, it would be a difficult task to find investors who would dole out $1 billion."

Hambro was upbeat, however, saying the global financial turmoil had not hurt "robust demand" for iron ore, according to a statement posted on the company's web site Wednesday.

"Aricom has a good geological base that is located close to a growth market and a well established rail, road and energy network," he said.

The London-based miner has about half of its resources and infrastructure in Russia, from which it is looking to supply steel to manufacturers in developing economies, particularly China and India. The company expects to sell around 700,000 tons of steel in Russia once the plant is fully operational.

Aricom Russia co-owner Pavel Maslovsky hinted in May that China could be invited as a partner in the Far East project.