2nd Oct 2013 09:00
LONDON (Alliance News) - Ferrum Crescent Ltd Wednesday said it will raise up to GBP864,000 in a private placement of 48 million shares and will use the funds for corporate activities and to carry out a feasibility study and mining rights activities while it awaits USD13.5 million in funding it recently agreed with Anvwar Asian Investment.
The iron-ore miner had Tuesday warned that there would be significant uncertainty over its ability to continue as a going concern if its deal with Anvwar Asian Investment cannot be completed or if it cannot raise additional funds to meet ongoing working capital requirements when required.
Ferrum signed an agreement with Anvwar Asian Investment September 21 under which the investment company will invest up to USD13.5 million in Ferrum's Moonlight iron ore project in South Africa in return for a 35% interest. The agreement will go through depending on "certain conditions", Ferrum said, without saying what the conditions are.
Proceeds from its private placement will be received in two tranches, the much smaller second tranche from two directors, Managing Director Robert Hair and Executive Chairman Ed Nealon, meaning it will need shareholder approval. It said it would convene its annual general meeting as soon as possible to approve the placement.
The first tranche will come from a placement of 44.6 million shares, raising about GBP803,037, the second tranche from a placement of 2.4 million shares with the two directors, raising about GBP60,963.
"Receipt of the proceeds of the issue will mean that the company remains fully funded, pending completion of the recently announced agreement with Anvwar Asian Investment to facilitate the completion of the company's Bankable Feasibility Study for the Moonlight Iron Ore Project," it said in a statement.
Ferrum Crescent shares were down 2.9% at 1,92 pence Wednesday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
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