South Africa focused coal miner Strategic Natural Resources PLC (AIM: SNRP) has raised £650,000 via a placing of 6.5 million shares in the company to boost its operating liquidity in view of its plans to further grow the business by entering new promising markets.
The shares were placed at a price of 10 pence per share, representing a roughly 20% discount to its current price of 12.5 pence.
The company is currently working to develop its business, looking at promising markets such as exports to further grow sales and planning to enter the industrial boiler market. In the absence of loan repayments from its broad-based economic empowerment partners, these developments have brought forward the need for further funding for investments and working capital, which was the reason behind the fundraising move.
SNR managed to achieve sales of £72,000 in the first half of the year, while its operating loss narrowed to £137,000 from £189,000.
The company is also coming off a failed takeover deal. Pennsylvania focused open cast miner Atlantic Coal (AIM: ATC) was in talks over a possible acquisition of SNR in early October, however the deal fell through after the SNR board declared the offered price of 15 pence per share did not recognise the “strategic nature” of the 97 million tonnes of in situ coal of its 74% owned South African subsidiary Elitheni Coal and its coal supply deal in place with IPSA Group (AIM: ISPA).