Kavango Resources PLC (LSE:KAV, OTC:KVGOF) said a £6mln conditional equity investment will be completed via a conditional subscription in two stages by Purebond Ltd, an existing 12.05% shareholder.
The subscription will be carried out by the conditional issue of 140mln new ordinary shares at a price of 1p per share and the conditional issue of 460mln shares.
The second stage will be subject to the approval by the Financial Conduct Authority (FCA) of a prospectus and shareholder approval for a waiver of the takeover code.
Purebond is a 100% subsidiary of Solai Holdings and Solai Pension Schemes holds 1mln shares in Kavango, less than 1%, of the total. Following the issue of the first stage of the subscription, Purebond and Solai will hold 226mln Kavango shares, representing a combined 26.7% stake, and if the second stages is completed this holding will rise to approximately 52.5%.
Ben Turney, chief executive of Kavango, said the equity financing is "a seminal moment for our company".
He added: "This year, we've redirected our attention in the Kalahari Copper Belt to our highly prospective Karakubis licence block, identified the lode gold potential at Ditau and made final preparations to drill the 28,700 Siemens B1 Conductor. We are also in the closing stages of at least one acquisition. With the substantial backing of Purebond, we now move forward with confidence that we have the resources available to pursue our exploration strategy."