Blencowe Resources PLC (LSE:BRES) has secured US$500,000 (£398,000) from an Africa-based specialist investor and is conditionally raising a further £2.5 million from another strategic investor.
Blencowe issued shares at 5p apiece in both subscriptions, representing a 33% premium to Monday’s closing price.
Under the terms of the conditional subscriptions, Blencowe is required to publish a prospectus on the basis that it will be issuing more than 20% of its issued share capital within a 12-month period.
The company and its advisers are in advanced stages of finalising the prospectus.
Funds are earmarked to advance the company's flagship Orom-Cross graphite project.
Alongside the anticipated further support from the US International Development Finance Corporation (DFC), the successful subscriptions are poised to bolster the company's efforts towards completing the Definitive Feasibility Study (DFS) and advancing the project towards construction.
“I believe it is testament of the quality of the Orom-Cross project that we have been able secure funding partners like this at a time when the junior mining sector continues to face significant difficulties with respect to sourcing capital,” said Blencowe’s chief executive Mike Ralston.
“We are hoping to deliver an NPV [net present value] in the DFS significantly higher than the post-tax NPV of US$482M achieved in the pre-feasibility study and will keep shareholders updated on our progress,” he added.
An application has been made for 7,487,000 new ordinary shares to be admitted to trading on the official list of the London Stock Exchange on Friday, 9 February.