JOHANNESBURG (miningweekly.com) – Stellar Diamonds has raised £324 500 through the issue of 5.9-million new ordinary shares, at an issue price of 5.5p apiece.
The miner noted that it had to scale back the placing to not exceed the company’s existing share authorities.
However, to provide an opportunity to all shareholders, it is looking to raise a further £250 000 at 5.5p apiece through an open offer.
Completion of the placing is expected to occur on or around February 27, subject to the resumption of trading of the company’s ordinary shares on the Aim and admission of the placing shares to trading on the Aim.
Currently facing limited working capital, it is expected that Stellar’s shares will remain suspended until completion of the placing.
The net proceeds of the placing and the open offer, as well as a $175 000 management fee, expected from its joint venture partner Citigate Commodities Trading towards the end of March, will be used to advance to conclusion the tribute mining agreement Stellar signed with Octea Mining earlier this week.
It will also be used to pay existing creditors of the business and for general working capital. Subject to the final quantum of funds raised in the open offer, the company also intends to pay the fee for the Tongo environmental licence of $150 000, which the directors believe will result in the issue thereof.
“We will need to raise further funds to allow implementation of the mine plan should the tribute agreement be entered into and, depending on the timing of this and the quantum of funds raised in the open offer, we may need to raise additional funds for working capital and payment of the Tongo environmental licence in the short-term,” Stellar said in a statement.