LONDON (Alliance News) - EMED Mining Public Ltd saw its share fall Friday after it said it has entered into a share subscription agreement with two of its cornerstone investors, to raise approximately GBP13.1 million needed for working capital.
The Europe-based minerals development and exploration company said it has entered into a subscription agreement with Yanggu Xiangguang Copper Co Ltd and Orion Mine Finance Master Fund I LP to raise the funds, subscribing for 140 million shares and 41.2 million shares, respectively.
The two investors have conditionally agreed to provide additional financing to the company by way of the issue of 181.2 million new shares at 7.25 pence per share, which EMED said will raise around GBP13.1 million.
EMED shares were trading 3.2% lower Friday morning at 7.50 pence.
Yanggu Xiangguang Copper Co Ltd, or XGC, will now have a 12.45% shareholding in the company, and Orion will hold a 14.48% stake.
The company had entered into negotiations with certain parties, including XGC and Orion, in respect of an equity financing to support an altered debt and equity structure. However it said discussions were taking longer than expected, and therefore decided to proceed with a share subscription to ease its short term cashflow issues and to fund its activities up to the end of 2014.
EMED said that discussion with major international financial institutions for senior debt facilities of USD200 million are ongoing, however it said it continues to optimise the right balance of debt to equity for the Rio Tinto Copper Project, which may include a reduction in the senior debt facilities being sought.
It said the funds will be specifically used for general working capital purposes and to continue activities on site, including continuing with final permitting and drilling activities at the Rio Tinto Copper Project.
The company said the proceeds of the subscription should now finance the company up until the end of 2014, which will give it time to enable it to finalise the optimal plans for the financing of the copper project.
"EMED Mining continues to steadily move towards commencing production at the Rio Tinto Copper Project... We have initiated our planned drilling campaign, which will help us develop our mining plan and extend the current resource. In addition, plant refurbishment is ongoing as we work closely with local authorities to progress the permitting process," said Chief Executive Officer Isaac Querub in a statement.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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