Savannah Resources Plc (LON:SAV) has raised around £1.3mln before expenses to fund work on its projects, including its Portuguese lithium mine, with the subscription backed by its largest shareholder, Al Marjan Ltd which will increase its holding to just under 30%.
The AIM-listed group said it is issuing 25,085,954 new ordinary shares at a subscription price of 5.25p per share plus the issue of one warrant per every two subscription shares at an exercise price of 6.0p with both new and existing investors.
In early morning trading, Savannah Resources shares were 2.5%,. or 0.12p higher at 5.0p.
READ: Savannah completes mapping and is now all set to drill in Portugal
The firm said the net proceeds of the subscription will be used by Savannah to fund work on its Portuguese lithium projects, to advance the Mutamba Project joint venture with Rio Tinto in Mozambique, and further work on the Oman Copper-Gold Project, as well as for general working capital purposes.
The company added that it will have a pro-forma cash balance of approximately £2.5mln following the receipt of the gross subscription proceeds.
Savannah said Al Marjan Ltd has increased its shareholding to 29.26% with a cash subscription of £520,000 under the fund-raising.
It added that Manohar Shenoy, an alternate director of the company, has subscribed for £200,000 worth of subscription shares which, when combined with the Al Marjan holding, will not exceed a total holding of 29.99% of Savannah’s shares.
Savannah CEO subscribes for shares
The group said David Archer, Savannah’s CEO, has subscribed for £300,000 worth of subscription shares in cash, providing him with a total holding of 5.65% of the company's total voting rights.
Matthew King, Savannah's chairman said: "Following the recent acquisition of our very exciting lithium projects in Portugal, we have augmented our funds with this capital raising, which was strongly led by our largest shareholder Al Marjan Ltd.
“We are excited that a drilling programme at our Mina do Barroso mining licence will start in the next few weeks and look forward to providing shareholders with further updates as appropriate."