Strategic Minerals (AIM:SML) announced that it has raised £1.1 million before expenses by way of a placing and subscription of 244m new ordinary shares at a price of 0.45p per share.
The proceeds of the placing will be used primarily to settle its final payment to New Age Exploration for the sale of its interest in Cornwall Resources which holds the Redmoor project.
The AIM-listed producing mineral firm said it will now be able to pay the remaining balance left from a total consideration of £990,000 to the Australian-based exploration company.
In May 2016, SML entered financial arrangements with New Age Exploration and acquired 50% of the Redmoor tin/tungsten exploration project through shares in Cornwall Resources Limited, the joint venture operating vehicle that holds the Redmoor licence.
Shares in Strategic Minerals were trading 25.60% lower at 0.465p on Thursday morning.
“Today's raise not only achieves this, through securing the balance of the Redmoor acquisition, but the Board considers that it will also remove a perceived market overhang associated with the need to fund this liability,” he said.
Broome added that after requests from shareholders to be involved with equity raises, the board “has been able to identify an efficient, cost effective method of allowing shareholders access to an issue."
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