Stellar Diamonds (LON:STEL) has raised in the region of £1mln through a placing of shares at 1.16p each.
The diamond mining and exploration company focused on West Africa said the funds from the share issue will mostly be used for the current trial mining at the company’s Baoulé kimberlite project in Guinea and for working capital purposes.
After issuing 88.36mln shares, the total number of Stellar shares in issue now totals 811.93mln.
"With revenues from our first diamond sale of a 5,900 carat parcel expected in the near-term this placement strengthens the company's balance sheet at a time when capital markets in the junior sector are notoriously weak,” said Stellar’s chief executive, Karl Smithson.
“It also underscores the support of our existing shareholders, most notably UBS Deutschland, and our directors, many of who are participating. We are also pleased to welcome new shareholders to the company at this exciting juncture in our growth and development,” Smithson said.
UBS Deutschland is the company’s second largest shareholder, and took 62.4mln of the newly issued shares, lifting its stake to 15.58%.
Lord Peter Daresbury, Steven Poulton, Luis da Silva and Markus Elsasser were the directors who subscribed for shares.
Taking the opportunity to give a quick operational update, Smithson said the company expects, based on the current processing capacity and grades, to continue to yield approximately 2,000 carats per month, and regular diamond exports and sales are expected during 2015.
"I look forward to providing further updates on production at Baoulé and our maiden diamond sale," Smithson said.
Stellar shares currently trade at 1.33p, up 8.2% on the day.