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(Alliance News) - Katoro Gold PLC on Tuesday said it raised gross proceeds of GBP215,000 through the placing and subscription of 17.2 million shares at 1.25 pence each.
The stock was trading 14% lower at 1.14p a share on Friday afternoon in London.
The gold explorer said the proceeds raised will provide additional working capital, allowing it to continue its projects without interruption amid uncertainty caused by the Covid-19 outbreak. It also said the funds will help it pay the final balance of the ZAR15 million loan, about GBP653,584, due to the Blyvoor joint venture.
Katoro is currently in a 50-50 tailings processing joint venture with Blyvoor Gold Operations Pty Ltd in South Africa, which it said is "progressing well". It also has the Imweru and Lubando exploration sites in the north of Tanzania.
Katoro said each share has a warrant attached to subscribe for a further share at 2p each. It said that it has 15.2 million warrants outstanding, adding that if all 32.4 million warrants are exercised it will receive an additional GBP547,000 cash.
Following admission of the new shares, Katoro will have 228.2 million shares in issue, of which Kibo Energy PLC will hold around 96.1 million shares, representing a 42% stake.
"Today's financing reinforces the working capital of the company at a highly important time in our development. In the context of the financing challenges faced by many companies with the impact of Covid-19, we are pleased to be able to demonstrate to our shareholders that the company has bolstered its working capital position and is able to confidently move our business forward, said Executive Chair Louis Coetzee.
"Katoro, fortuitously, is focused at present on office-based work programmes across its projects, which are progressing well and have only experienced a small disruption from the changes to working practices around the world," he added.
Separately, the company said it has also made "good progress" on its work to conclude the transaction with Lake Victoria Gold for the sale of its wholly-owned subsidiary Reef Miners Ltd. The transaction was originally to include the sale of the Imweru and Lubando projects but will now only involve the disposal of the Imweru project.
Katoro noted that as Lubando is now being retained by the company, the transaction no longer requires shareholder approval.
By Ife Taiwo; ifetaiwo@alliancenews.com
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