Aim-listed Arc Minerals has raised about £4.14-million in aggregate, before expenses, through the placing of about 210-million shares and a subscription of about 19.78-million subscription shares at an issue price of 1.8p a share.
The company had set out to raise about £3.5-million.
As part of the fundraise, the company will also issue about 229.78-million warrants, in the ratio of one warrant for every one new ordinary share subscribed for in the fundraise, following admission.
"We are pleased with the level of support shown from new and existing investors for this next stage of Arc Minerals' development and I look forward to providing more updates on our activities in Botswana and Zambia over the coming months,” says Arc Minerals executive chairperson Nick von Schirnding.
The net proceeds of the fundraise will be used to progress the company's Botswana exploration programme; to assess potential new licence areas in Zambia; if a target licence area is identified, to fund the associated due diligence costs of acquiring the licence and any initial work programmes; and for working capital purposes.
The directors also propose to use some of the proceeds of the fundraise to undertake a potential off-market buyback of the company's ordinary shares from a significant overseas shareholder.
“The directors can confirm they have now received an indicative, non-binding agreement to the potential buyback from the relevant overseas shareholder. Further updates will be provided if a binding agreement is executed, although the directors have every confidence it will be executed shortly,” the company says.
If the potential buyback completes, the company notes that it is the directors' intention that the acquired ordinary shares be cancelled.
The directors believe the ability to buy back a specific targeted shareholding in this manner will be beneficial to shareholders as a whole since, by executing such a transaction, the company should be able to ensure the shares are disposed of in an orderly manner so as to avoid a considerable volume of shares being sold in the market far in excess of normal daily volumes of trades.
The directors anticipate applying half of the funds raised to the potential licence acquisition process and the potential buyback.
In the event that no new licence areas are identified and/or the potential buyback does not progress, all associated funds will be applied for general working capital purposes and to progress work on the company's Botswana licences.
The company has also agreed to issue to WH Ireland, subject to completion of the placing, around 5.7-million new ordinary shares at a price of 1.8p an ordinary share for advisory services in connection with the placing.
On admission, the total number of ordinary shares in the capital of the company in issue will be around 1.47-billion with voting rights.