Ferro-Alloy Resources Limited (LON:FAR) said it has raised US$300,000 through a bond issue on the Astana Stock Exchange in Kazakhstan as the group also announced that it restarted its production operations in the country.
The vanadium miner said investors have subscribed for 150 of its bonds with a nominal value of US$2,000 each. The bonds are unsecured with a three-year term and bear interest at 7.5%, paid twice-yearly.
READ: Ferro-Alloy Resources rated a “buy” by VSA, with a target price set at 171p
Around 50 of the bonds have a maturity date of June 5, 2023, while the remaining 100 bonds have a maturity date of June 11, 2023.
Meanwhile, the company said production from the hydrometallurgical process was restarted on June 1, 2020, and that it now has “significant production” from both its hydrometallurgical and pyrometallurgical process routes.
In the first 10 days of resumed operation, Ferro-Alloy said daily overall production has been 69% higher than the average for the first quarter of 2020, in spite of what it said were some “continuing [coronavirus] related delays” to the completion of commissioning of some new equipment.
The company said it expected “further significant rises in production” over the next few months as these issues were remedied.
Ferro-Alloy also said that the impact of the pandemic on Kazakhstan was “muted”, although there were currently some commissioning issues with newly installed equipment that cannot be resolved by the equipment suppliers because they cannot presently visit the site due to lockdown restrictions.
The company said it has ordered the necessary parts independently of the manufacturers with delivery and installation expected over the next two months.
"The issue of the bonds on these terms is a big vote of confidence in the company. With increasing production from both the hydrometallurgical and pyrometallurgical production facilities, we have a firm base which will let us focus on the remaining expansion plans and the upgrade of the feasibility study", Ferro-Alloy’s chief executive Nick Bridgen said in a statement.
“We believe that today’s announcement demonstrates positive progress for FAR and expect this progress to continue in the coming months translating into positive earnings and share price performance”, said analysts at VSA Capital, who retained their ‘buy’ rating and 171p target price in a note on Friday.
Shares in the company rose 1.6% to 9.4p in early trading.
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