Ferro-Alloy Resources Limited (LON:FAR) has raised £733,000 from an equity issue with the proceeds earmarked for enhancements to operations in Kazakhstan.
The group said the proceeds will fund connection to an adjacent high voltage power line, a project described by the company as a project of major importance as it will provide a more reliable power supply, have greater capacity and cut power costs by more than half.
It will also fund the installation of equipment to convert ammonium metavanadate (AMV) to vanadium pentoxide, allowing the product to be sold to a bigger market of customers and without discount to prevailing prices.
Several process improvements will also be funded from the raise, including work on the process plant and on-site accommodation for senior technical staff.
To raise the cash, the company is issuing £500,000 of equity, some 6.25mln shares sold at 8p each, and is issuing 150 bonds on the Astana Stock Exchange for a total of US$300,114. The bonds are unsecured, carry interest at 7% and mature in March 2023.
"We have already completed a great deal of good work towards increasing production from existing operations but the limited and unreliable power has held us back,” Ferro-Alloy chief executive Nick Bridgen said in a statement.
“The plant improvements and new converter for the AMV will yield quick benefits to production and therefore revenue, and we look forward to even better production upon the completion of the new powerline in Spring 2021.
"The new power connection is also a step towards the planned development of the Balasausqandiq project, one of the world's largest and lowest cost vanadium mines, which will draw power from the same line," he added.