Beowulf Mining PLC (AIM:BEM) shares were down 22.5% in morning trade after unveiling a £9.1mln fundraiser that will allow it to ‘progress the pace’ of Kallak North, an iron ore deposit in arctic Sweden.
The cash call will come in the form of a partially underwritten rights issue coupled with a retail offer of stock organised by Primary Bid.
The shares reacted to the news by falling 0.9p to 3.1p a share.
It’s likely investors and market makers are reacting not to the securing of a significant tranche of funding, but to technical factors such as the stock dilution that will be caused by the sale of discounted shares.
Beowulf’s main asset is the Kallak iron ore deposit, 40 kilometres west of Jokkmokk and 80 kilometres southwest of the major iron ore mining centre of Malmberget.
Test work identified high-grade magnetite concentrate at 71.5% iron, with minimal detrimental components.