Xtract Resources PLC (LON:XTR) announced new funding arrangements to fund short and medium-term needs as it focuses solely on its Manica gold project in Mozambique.
It has struck a subscription deal and equity swap agreement with investor YA II EQ, Ltd (an affiliate of the former YA Global Master), which will see YA ultimately gain a 19.14% stake in Xtract.
The subscription sees the miner gain £980,000 in cash in exchange for 3.5bn shares.
Xtract will initially retain £110,000 of the proceeds for working capital purposes, while the remaining £870,000 will be used to make payments under the equity swap deal.
YA II EQ, Ltd will make 12 monthly payments to Xtract of £72,500 at the end of each month, commencing with 30 November 2016, which will be settled with shares.
Xtract executive chairman Colin Bird said: "As previously reported, the company had over previous months encountered challenges at Chepica and Manica which required attention, and the same time provided opportunities.
"The focus of the company is now solely on our project at Manica. We have entered into this new funding arrangement to ensure the company remains funded for its short and mid-term progress. As the company moves forward to ensure Manica's value is fully released, shareholders will be kept updated and fully informed on direction".
The group also has a loan and what’s known as a standby equity distribution agreement (SEDA) with Yorkville.