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South Africa-focused miner DiamondCorp (LON:DCP) revealed it had raised the maximum under its open offer and placing at £5.27 million to advance the economics of the Lace mine.
The open offer followed a placing last month, which raised just short of £3.2mln priced at 10p.
The offer was at the same price and applications were received for 64% of the shares on offer. Around a further 7.5mln were available under an "excess application facility" and applications were received representing 4.9 times the excess shares available.
Euan Worthington, DiamondCorp chairman, told investors: "The board is very pleased at the high level of over-subscription for the open offer and that the majority of shareholders have been able to participate on the same terms as the recent placing to institutions. We thank shareholders for their continuing support and look forward to an exciting future"
DiamondCorp went ahead with the placing after deciding to end a US$7mln royalty financing deal with South African group Acrux.
Bulk sampling is currently underway at the Lace mine ahead of a ramp-up to full production.
The money raised from the placing and offer will be used to fund the £1.8-2.8mln working capital shortfall to bring Lace into production in H2 this year; the purchase of two dump trucks and the deposit on a high-volume optical and x-ray waste sorter to reduce the volume of internal waste rock from kimberlite ore prior to processing.
This equipment has the potential to significantly reduce plant water and electricity consumption and increase processing rates, DiamondCorp has said.
The fundraise news was met positively by analysts in the City.
Investec said: “While only a modest raising, the strong over-subscription indicates that there is still good support for companies and sectors that deserve it.”
Shore Capital noted the diamond firm had received an "overwhelming" number of applications under the excess facility, such that those applying for excess shares could only be allotted around 20.4% of the shares they had applied for.
"...following one of best-supported open offers in recent years; we believe Lace to be funded to commercial production in H2 2015," said analyst Yuen Low in a note.
Panmure repeated a 'buy' but lowered the target slightly to 23p from 25p.
It says the dilution caused by issuing new shares slightly outweighed the positive value impact of removing the previously planned 3% royalty on diamond sales and accordingly, its discounted cash flow valuation now equates to 30p - not 34p.
The broker also noted that this valuation does not take into account the potential price upside from the recovery of Type IIa diamonds, which have recently been discovered, at Lace.
Shares were 1.12% lower at 11p each at the time of writing.