Xtract Resources PLC (LON:XTR) is to raise funds so it can terminate its loan note facility with YA II EQ.
The company has conditionally placed 76.47mln shares at 1.7p to raise £1.3mln. The shares fell 0.42p to 2.2p on the news.
The company said the outstanding amount owed under the loan note facility is £583,000, leaving some cash over from the placing to spend on meeting pre-production costs for the company’s Manica alluvial operations.
READ: Contractors on the cusp of first production at Xtract’s Manica gold project
"The funds have been raised to fully settle the amount due to YA II EQ Ltd. This decision was made on the basis that the company has determined the full number of shares to be issued and therefore would not face an uncertainty as to the future number of shares to be issued to YA and therefore conserve future earnings for company development,” said Colin Bird, Xtract’s chairman.
“This is an exciting time for the company as it moves forward with sufficient funds to cover pre-production costs for the Manica Alluvials projects. Both contracting parties are progressing the production preparations and remain on target, if not ahead of their contractual target," Bird revealed.