JOHANNESBURG (miningweekly.com ) – Exploration company African Potash has secured £1.2-million in funding through the placing of new ordinary shares with Cornhill Capital.
Placing proceeds would enable the company to redeem the outstanding convertible securities held by financier Bergen Opportunity Fund and to fund ongoing working capital requirements, the Aim-listed company said in a statement on Friday.
African Potash would issue 216-million new ordinary shares, at a price of 0.3p each, on April 21, to raise £650 000 and 183-million new ordinary shares, at a price of 0.3p each on May 22, to raise £550 000.
Under terms agreed with Bergen, the company would redeem the convertible securities for an aggregate amount of $974 000.
"Bergen provided the company with an important bridge [loan] in August 2014, and has been an accommodating and flexible financing partner for the company,” African Potash executive chairperson Chris Cleverly said.
He added that securing this new funding was an important development for African Potash.
“It enables the company to continue the evaluation and planning of a further work programme at the Lac Dinga potash project, as we aim to translate the significant commercial value of this strategic asset into meaningful value for shareholders. I look forward to providing further updates relating to our corporate and operational progress in due course."
The Lac Dinga project, in the Kouilou region, in the Republic of Congo, currently had an estimated resource of 1.1-billion tons, grading 20.6% potassium chloride.