16th Oct 2014 08:02
LONDON (Alliance News) - Stellar Diamonds PLC saw its shares rise early Thursday after it raised about GBP396,180 before expenses in a share subscription by its biggest shareholder, money it will use to buy a number of earth moving machines for its Tongo project in Sierra Leone and Baoulé project in Guinea from that shareholder.
It said it issued nearly 25.6 million new shares to its largest shareholder, Foradex Invest SRL, at 1.55 pence each, as well as one half warrant per subscription shares to subscribe for nearly 12.8 million shares at the same price. The warrants are exercisable immediately and expire in April 20, 2015.
Foradex will hold 187.4 million Stellar shares after the subscription shares are admitted to trading, or a 25.9% stake.
Stellar Diamonds shares were up 5.4% at 1.26 pence early Thursday, one of the best-performing stocks on the AIM All-Share index, as the subscription price was above Wednesday's closing price.
Stellar said it will buy the machines, worth about EUR0.5 million, from Foradex. It said it conducted extensive due diligence of the second-hand earth moving machine market and had confirmed the machines and prices offered by its shareholder were "fair and market related".
Its Baoulé project, where it recently recovered the first diamonds after the processing plant was commissioned, will get most of the machines it is buying. Stellar wants to increase the mining and production rate at the project as part of large scale bulk sampling, or trial mining, over the next twelve months.
By Steve McGrath; [email protected]; @stevemcgrath1
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