15th Apr 2016 09:15
LONDON (Alliance News) - Herencia Resources PLC soared on Friday after it said it has been advanced the first USD100,000 from its recently secured loan to keep the company ticking over for at least another week, and said its chief executive has resigned and will leave later this year.
Herencia had said it was close to securing the financing on Thursday, but confirmed it has drawn down part one of the first tranche, totalling USD100,000, on Friday. Importantly, those funds will only cover the company's working capital for "approximately a further week".
The Australian Special Opportunity Fund and Oriental Darius Co Ltd are the shareholders providing the USD500,000 loan, and Herencia said it expects to draw down a further USD100,000 "shortly," which would keep the company ticking over until "end of April/early May," it said.
Although Herencia said there is no reason for its lenders to reject the drawdown of that second USD100,000, it did state there was no guarantee the tranche would be secured. A long-term solution to its financing woes will still need to be found.
This latest loan will be added to the string of loans supplied to the company by shareholders and its board.
Chairman John Moore and major shareholder Lind Partners have recently made loans to the company. One of the reasons Herencia is struggling financially is because of its deal with Chilean mining company Next Minerals, its partner on the Picachos and Pasitzal copper projects.
Herencia also said that Chief Executive Graeme Sloan will stand down from his role, but he will not leave until the end of June in order not to disturb the current progress being made and to give Herencia time to find a replacement.
"Graeme has taken this step reluctantly but personal issues have forced him to consider his options. I want to thank Graeme for his leadership during a very difficult period for commodity prices and mining companies generally," said Chairman John Moore.
The company said it has appointed Mark Bolton as a consultant to help with its search for a replacement CEO.
Herencia shares were up 45% to 0.0690 pence per share on Friday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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