(Alliance News) - Emmerson PLC shares sank on Monday, as the company said it would be submitting amended environmental approval applications for its Moroccan potash project and announced a discounted fundraise.
Emmerson is a resource development company, primarily focused on its wholly owned Khemisset potash project in northern Morocco. Shares in the company were down 15% to 1.87 pence each in London on Monday.
Emmerson said it will be resubmitting an environmental impact assessment for Khemisset to the Moroccan authorities, after its July application for environmental approval was met with concerns from the Moroccan investment commission.
Emmerson believes that the incorporation of the environmental optimisations into the design of the Khemisset project, including a reduction in water consumption and the elimination of brine disposal, "address the major concerns related to water identified by [the Moroccan commission]."
The assessment will be submitted in the coming days, Emmerson said, and the company will announce the outcome of the review in due course.
Emmerson has also entered a subscription agreement with Global Sustainable Minerals Pte Ltd and Gold Quay Capital Pte Ltd for USD2.2 million worth of new shares.
The proceeds will go towards advancing feasibility studies at Khemisset.
GSM will subscribe for 90.7 million shares totalling USD2.0 million, with GQC subscribing for 7.9 million totalling USD175,000, both at a placing price of 1.75 pence per share.
This represents a discount of around 16% to Emmerson's five-day volume weighted average price of 2.09p.
The investors will also receive one warrant per share to subscribe for additional shares, with an exercise price of 3p and an expiry date of December 31.
On completion, GSM's shareholding in Emmerson will exceed 20%, granting it the right to appoint a representative to the company's board of directors.
Mark Zhou, chief executive officer of GSM, said: "We are delighted to be able to demonstrate our commitment to Khemisset, which we believe is an outstanding project."
The offer has also been made available to Emmerson's existing retail shareholders in the UK. The offer will be at the same price and take place on the REX platform. The offer is expected to close at 1:00pm on Monday.
By Hugh Cameron, Alliance News reporter
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Emmerson (EML)