Red Rock Resources PLC (AIM:RRR) said it has entered into a funding agreement with Diversified Metals Holdings LLC, a US-based institutional investor, to raise up to US$1.5mln (£1.2mln) via a share subscription.
The natural resource development company said it will initially raise US$500,000 to be used to fund ongoing exploration and to meet its working capital requirements.
Following the initial subscription, Diversified Metals may make an additional advance of US$1mln through a further share subscription within the next 18 months.
"We are pleased to have secured this financing leading into 2023, especially given the headwinds facing natural resource exploration companies generally at present,” said Red Rock chairman Andrew Bell in a statement.
“As previously reported, the company is at an important juncture, as it awaits the signing of the arbitral award in the Democratic Republic of Congo, where it seeks from the buyer of certain assets partially owned by the company, US$7.5mln of the consideration due to be paid. The Company separately seeks the enforcement of its existing judgment for $2.5m against its former partner in respect of that portion of consideration already paid.
"While we continue to have confidence that we will receive an award, the timing and payments cannot be assured and therefore, by securing this funding, we have taken steps to meet our immediate exploration and working capital needs," Bell added.
The price of the subscription shares will initially be equal to 70p per share, representing a premium of almost 80% compared to Red Rock’s closing share price of 39p on December 14, 2022.