LONDON (Alliance News) - Amara Mining PLC said Tuesday that it plans to raise GBP13.2 million through a share placing with institutional investors, with the proceeds to be used to advance its Yaoure Gold Project in the Ivory Cost to a construction decision.
The placing will be conducted via an accelerated bookbuilding process, and the price and number of shares issued in the placing will be determined at the close of the bookbuild, the company said.
Shares in Amara closed down 2.5% at 18.40 pence Tuesday.
Amara said its cash balance as at the end of 2014 was USD2 million, and it is fully-funded to deliver a pre-feasibility study for the project in March 2015. The proceeds from the placing will allow it to deliver a bankable feasibility study in the fourth quarter, and undertaking negotiations with the government for an exploration licence and mining convention for Yaoure.
It plans to undertake further resource definition drilling, and additional exploration work on the site. The balance of the net proceeds will be used for general working purposes, it said.
Amara said its Baomahun Gold Project in Sierra Leone is currently on care and maintenance due to the Ebola outbreak, and once the situation has improved, it intends to deploy an exploration team to review the project geology and re-assess the ore-body with the aim of optimising its existing easibility study.
Legal proceedings have been brought in Burkina Faso by BCM Burkina SARL alleging that Amara, along with Seguénéga Mining SA and Kalsaka Mining SA are jointly liable for the debts of Seguénéga and Kalsaka to BCM worth around GBP11.6 million, along with GBP4.3 million of damages and court fees. On the back of these claims BCM implemented seizures of assets in Burkina Faso, however, the seizure of assets of Seguénéga and Kalsaka have been suspended due to BCM's liquidation and creditor protection processes.
The protection of these assets is pending the outcome of the court proceedings, although Amara said it remains in control of its assets during the seizure process, and is not prevented from fulfilling its work requirements in the Ivory Coast during this period.
Amara stressed that it has "no contractual responsibility" for the debts, and given its current legal advice believes BCM's claims against it are "highly unlikely to succeed or have any recourse to Amara", although legal costs are being incurred as it defends itself.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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