Mining exploration company Altona Energy said on Thursday that it is looking to raise up to £0.5m to fund its new rare earth element strategy.
The AIM-traded firm said the fundraise was at a price of 6.5p per share, representing a discount of 32% to its current suspended share price of 9.5p.
It said it would also issue warrants at 12p, with one warrant being issued for every two shares subscribed for.
The fundraise would be open to existing shareholders and non-shareholders alike.
Altona Energy had announced on 4 September and 21 September that it has signed heads of agreement with two African mining companies to acquire a majority stake in two rare earth element projects – one in Malawi, and one in Uganda.
Additionally, it was waiting to finalise heads of terms on two further African rare earth element mining projects, in which it was in advanced negotiations to acquire majority stakes.
It said each of those projects had been evaluated, with the cost of initial exploration calculated.
In some cases, extensive exploration work had already been carried out, so Altona would need to conduct limited exploratory test drilling and core sampling to establish whether a further fund raise would be needed to produce a full resource estimate at each site during 2021.
The firm said its immediate working capital requirements, having been “significantly reduced” in the past two years, would also be met out of the round of funding.
A second round of funding would be needed within six months to continue exploration, and to help the company in its proposed transition to London’s Standard Market, should that remain the most suitable option to raise further funds.
“Following six months of diligent work by the team at Altona, we are in position to raise capital to begin exploration work on the rare earth mining projects we have agreed to acquire,” said interim chief executive officer Christian Taylor-Wilkinson.
“Part of the initial process will be to conduct further due diligence into the companies we are acquiring and the assets we will own.”
Taylor-Wilkinson said it expected the process to take a further 60 days, with the cash the company hoped to raise to be a key part of the process.
“Although still early days for our new strategy, the board is confident it has found the right sector and most suitable projects to begin delivering positive results to shareholders.”
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