AfriTin Mining Ltd (LON: ATM) have seen their shares sink on Tuesday afternoon after the firm reported that it had experienced delays at its Namibia mine.
AfriTin Mining is a mining company with a portfolio of near production tin assets in Namibia and South Africa.
The firm saw shares sink 4.07% to 2.95p. 26/11/19 13:00BST.
Earlier this year, AfriTin shares rallied on encouraging Uis venture tests, saying that the Namibian operations had promise.
Today shareholders have been updated that the firm has raised £3.8 million in a convertible note issue, partly helps up by an existing shareholder to allow compensation for the delays in Namibian operations.
The £100,000 notes last for 18 months and pay an interest rate of 10% per year. They are convertible at 4 pence per share, a 36% premium to AfriTin’s closing price in London on Monday.
The notes have been placed with tin trading firm AfriMet Resources AG and existing shareholders.
AfriMet is a subsidiary of Swiss commodity merchant Vanomet AG. Were AfriMet to covert the notes, it would hold 5.8% AfriTin.
Guernsey-based AfriTin will use the funding for general purposes as it looks to complete feasibility studies for the expansion at Namibia’s Uis tin mine, and also work on testing a recent lithium discovery.
At Uis, the company said mining is going well, but warned there has been a delay in connecting the site to the grid, though this has been resolved.
Chief Executive Anthony Viljoen commented: “I am pleased to announce the raising of £3.8 million by way of a convertible loan note, anchored by AfriMet. We have been collaborating with AfriMet to establish multiple channels for revenue generation from the trade in tin and tantalum products as well as offering participation to our existing shareholder base, who have also subscribed to the loan note.
“Our mining activities are proceeding as planned and there are two mining areas producing ore. This bodes well for our steady state production requirements in the future. We should ship our first tin concentrate from Uis at the end of November, a noticeable achievement for the company.
“Ramp up at the processing plant has progressed slightly slower than expected due to the delay in receiving grid power. The connection in grid power is now complete and this will allow for testing of final processing refinements for the ramp up to steady state phase one levels into 2020,” Viljoen continued.
Firms such as Bluejay Mining (LON: JAY) and Amur Minerals (LON: AMC) have also used share placing to raise funds for projects.
Established names such as Hochschild Mining (LON: HOC) and MC Mining (JSE: MCZ) have seen their shares crash since Friday after they cut their annual profit expectations.