Democratic Republic of Congo (DRC) copper-miner Nikanor’s stock took an almost-6%% knock after it announced that it would issue some 62-million new shares, in order to raise £372-million, or R5,2-billion, worth of funds to develop its KOV mine and related infrastructure.
The placement, half of which news wire Bloomberg reported Glencore would buy, represented nearly half of Nikanor’s existing issued share capital.
The firm had also signed an agreement under which Glencore would buy the entire copper and cobalt production at its DRC project.
The capital raising had become necessary after the LSE-listed company announced that there had been a significant increase in costs at the KOV project earlier this year.
“Last week we confirmed that SRK had reviewed the total funding estimate for the project of $1,8-billion and found it to be reasonable,” chairperson Jonathan Leslie said. “Following the placing, the Nikanor will have net cash of up to $1-billion, giving us the flexibility to place key contracts and to proceed with the project according to schedule.”
Shares in Nikanor were trading at £6,85 a share, down 3,11% for the day, by 14:57 London time, up from a daily low of £6,22.