BlueRock Diamonds PLC (LON:BRD) announced after the close on Monday that it has raised approximately £500,000 via a placing and subscription for 33,333,333 ordinary shares at a price of 1.5p each.
The group added that each new placing share will also be accompanied by a warrant to subscribe for a further new share at a price of 3p each. In early morning trading, BlueRock shares were trading at 1.75p, down 5% on Monday's closing price.
The AIM-listed diamond miner said the larger part of the fundraising's proceeds will be used to develop and expand mining activities at its Kareevlei Diamond Mine in South Africa, and will also be used to continue to upgrade its crushing and processing plants to increase efficiencies and reliability.
WATCH: BlueRock Diamonds to ramp up production in 2018 at Kareevlei mine
BlueRock said measures were being taken to increase the recovered grade at Kareevlei from the current expectation of 3.5-4.5 carats per hundred tonnes (cpht) as well an ensuring the 2018 production target of 275,000 tonnes would remain at the bottom-end of the company’s range of expectations.
Adam Waugh, chief executive of BlueRock, said: "Opening up Pipe 1 will offer us flexibility in our mine planning as operations expand at Kareevlei. These funds will allow us to do the necessary preparation to Pipe 1 and put us in a position to be mining kimberlite from Pipe 1 during Q3 2018. We are currently mining Pipe 2 and continue with our bulk sampling work at Pipe 5.”
He added: "We are excited by the potential we've seen at Kareevlei particularly, as we have been progressing deeper into Pipe 2. We look forward to continuing to expand our operations and soon having kimberlite available from three of our five identified kimberlite pipes."
The company also announced the appointment of SVS Securities Limited as its joint broker.