Metminco Limited (ASX:MNC)(AIM:MNC) is seeking to raise up to A$5.3m through a A$5.1mln rights issue and A$190,000 placement.
The money raised will be used to undertake exploration on the company’s Colombia gold properties, and to retire an outstanding convertible note.
READ: Metminco cancels March meeting as Redfield requests to redeem notes
The 7-for-2 issue and the placement are both priced at A$0.01 per share, and each three new shares come with an option for one more share exercisable at A$0.013.
The drilling paid for by the new funding is expected to commence in April 2018.
Metminco is also in the process of appointing a new board which will look to divest non-core assets in Chile and commence a round of initiatives aimed at reducing overheads.
"At its current market capitalisation, there is minimal value attributed to Metminco's exploration assets in Colombia, which have obvious potential to produce a world-class discovery,” said Metminco executive chairman designate Kevin Wilson.
“The capital raising initiative announced today will allow us to conduct meaningful drilling on these projects and better demonstrate that potential to the market."
The rights issue price is a 74% discount to the closing price on ASX of 27 February 2018 of A$0.039 cents. It is a discount of 77% to the basic 30 day volume weighted average price on ASX of A$0.044.