29th Jan 2016 11:13
LONDON (Alliance News) - Wolf Minerals Ltd on Friday said it is to establish a GBP25.0 million equity facility with Resource Capital Funds, in a move allowing it to ramp up the processing plant at the Drakelands open pit mine in southwest England.
"The offer to subscribe for shares at a premium to the current share price indicates its confidence in the project and positive view on the long-term tungsten market dynamics," Managing Director Russell Clark said.
"The establishment of the facility will enable the company to focus on ramping-up the processing plant at Drakelands at a time when the tungsten price has fallen almost 50% since construction of the plant commenced in March 2014," Clark added.
The terms of the standby equity facility mean that RCF VI, an associate of 41.7% shareholder Resource Capital Fund V LP, will subscribe for up to GBP25.0 million at 9.19 pence per share of stock.
The deal allows Wolf to request RCF VI to subscribe for fully paid, ordinary shares at the same price at any time during the six months following the establishment of the facility. Drawdowns from the facility will be used to support operations at Drakelands and facilitate the company's existing debt repayments.
The facility depends on shareholder approval, among other conditions.
Shares in Wolf were up 1.5% at 8.24 pence on Friday morning.
By Samuel Agini; [email protected]; @samuelagini
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