LONDON (Alliance News) - StratMin Global Resources PLC shares swooned late Monday afternoon, after it said it has raised GBP900,000 through an oversubscribed placing of over 18.9 million shares at a discounted price of 4.75 pence per share with new and existing institutional investors.
StratMin shares dropped to the placing price of 4.75p after the announcement and were trading near the close at 5.15p, down 16%. They opened Monday at 6.12p.
The new shares represent about 14% of the company's enlarge share capital.
As part of the placing, the company also has agreed to issue one warrant for one StratMin share for every two placing shares subscribed by the institutional investors. The warrants are exercisable at 8.0 pence per share any time before January 23, 2016.
The net proceeds will be used to purchase more plant machinery, in particular, milling, screening and drying equipment. The company also will use part of the net proceeds to expand its spare parts inventory to further improve production consistency and reduce plant downtime as a result of a part failure.
"These funds will further help the company accelerate this progress as we continue to move steadily towards fulfilling our strategic objectives. I would like to thank all existing shareholders for their continued support and am pleased to welcome a number of new institutions onto the register as part of what was a very well received placing," said Managing Director Manoli Yannaghas.
StratMin said it conducted the placing after failing to finalise a debt facility with a potential provider as it "proved prohibitively expensive as a result of the current adverse market conditions," leading to StratMin deciding the "funds would be more economically raised via the equity market," it said.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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