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LONDON (Alliance News) - Red Rock Resources PLC on Friday said it has raised GBP407,500 through a share placing, with natural resources investment company Metal Tiger PLC taking about a third of the new shares.
Red Rock said it will issue 97.0 million shares at 0.42 pence per share to raise the funds. Red Rock shares were down 1.8% to 0.53p.
In addition, Red Rock issued one warrant to each subscriber exercisable at 0.84 pence per share.
The funds will back drilling work at Shoats Creek project in Louisiana, US and will allow Red Rock to develop its existing gold interests and pursue potential acquisitions.
Metal Tiger, the AIM-listed resources investor, has agreed to subscribe for 29.8 million of the shares, spending GBP125,000, and will subscribe for another GBP100,000 shares in Red Rock under a strategic equity exchange agreement between the two.
Metal Tiger will have the right to appoint a non-executive to Red Rock's board at any time over the next 12 months under the agreement.
Red Rock and Metal Tiger on Thursday said they will invest GBP225,000 in another AIM-listed gold miner, Goldstone Resources Ltd. The pair will pay half the consideration each, with Metal Tiger paying in cash and Red Rock in shares.
Three Red Rock directors are also participating in the new issue. Chairman Andrew Bell will subscribe for 4.8 million shares, spending GBP20,000. Non-Executive Director Sam Quinn will buy 1.8 million shares for a total of GBP7,500 and Executive Director Scott Kaintz will subscribe for the same number as Quinn.
Bell will now holds a 3.0% stake in the company, with Quinn holding a 1.2% interest and Kaintz 0.8%.
"This financing comes at a key time and marks the point from which the potential for a sustained recovery in the natural resource sector and for Red Rock Resources becomes more visible," said Bell.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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