LONDON (Alliance News) - West African Minerals Corp Wednesday said it has raised about GBP3.7 million in a placing of 52.8 million shares at 7 pence each as well the issue of one warrant for every two placing shares, and will use the money to fund the development of its Binga license zone in Sierra Leone.
In a statement, the iron ore mining and exploration company said each warrant issued is exercisable over the next two years for one new ordinary share at 10 pence a share.
It said it is planning a staged work programme at the Binga zone in 2014. Depending on the results of metallurgical test work, which it expects to receive in the first quarter, the money will fund ground-based geophysics work, additional infill drilling on geophysics to target an increased mineral resource, and conceptual studies on commercial operations including a port and terminal.
The company had previously said it was mulling a USD6 million fund raising early in 2014 and had received the support of some of its largest shareholders.
In its statement Wednesday, it said Plinian Guernsey Ltd, which currently has a 10.7% stake, had subscribed for 1.4 million placing shares and 714,285 warrants. CE Mining Ltd, which is 50% owned by Plinian, subscribed for 10.1 million shares and 5.1 million warrants. Plinian will hold a 12.4% stake after the placing shares are admitted for trading.
Galloway Ltd's stake will increase to 6.6%, from 6.0%, while Panetta Partners Ltd's stake will rise to 8.7%, from 5.8%, as they also subscribed.
West African Minerals Director James Mellon will have an interest in 6.8% of the company after the placing because he owns shares outright, but he also has a life interest in a trustee that indirectly owns Galloway. Plinian, meanwhile, is controlled by West African Director Brad Mills, while another director, Anton Mauve is also a shareholder. Therefore the subscriptions by CE Mining, Plinian and Galloway are counted as related party transactions under AIM rules.
"We are very pleased with this placing as it will enable the company to continue with the next steps to determine a high-level techno-economic assessment of the Binga project. The metallurgical test program has been finalised and samples are currently en route to a test facility in South Africa," Mills said in a statement.
"As a result of the strong aeromagnetic indications of potentially mineralised strike extensions and satellite magnetite-bearing bodies, several areas have been identified for ground-geophysical follow-up and potential drill testing," he added.
"Based on the success of the foregoing, and in view of its close proximity to port, the Binga project could represent a clear strategic advantage for the company with the potential for cash flow in the near term," Mills said.
West African Minerals shares were down 15.7% at 7.06 pence early Wednesday.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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