Firering Strategic Minerals PLC (AIM:FRG) shares fell 17.6% to 1.05p after £2.5 million was raised through a placing and subscription to fund an increased stake in its Limeco project in Zambia.
The AIM-listed quicklime producer and critical minerals explorer issued 250 million new shares at 1p each, representing around 39% of its enlarged share capital, and a discount to the last close price of 1.27p.
The fundraising is conditional on shareholder approval at a general meeting on 18 May, in which case the new shares would be admitted on 19 May.
Net proceeds of about £2.34 million will primarily be used to acquire a further 5.5% interest in Limeco, taking Firering’s holding to 41.7%, alongside funding operations and working capital.
The company retains an option to increase its stake to 45% later this year through a final payment.
Directors participated in the subscription, subscribing £130,000 in aggregate.
Firering said Limeco, a former Glencore-owned limestone project near Lusaka, has a resource of more than 73 million tonnes and potential production of 500-600 tonnes of quicklime per day.
Chairman and interim chief executive Youval Rasin said: "Limeco has continued to make operational progress, having effectively reached breakeven, secured its first contract with a major copper producer, and increased output."
Increase ownership in Limeco comes at an important stage in development, Rasin said, and "leaves us well positioned as we look ahead to bringing Kilns 3 and 4 online".
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