Amur Minerals, (LON: AMC) have made an announcement on Monday morning saying that they have raised £1.2 million through a discounted share subscription in order to repay a loan and fund the business.
Amur issued 70.6 million shares at 1.7 pence per share, showing a need for the firm to raise funds whilst maintaining their strong business plans for the end of the year.
This may come at a harmful price for Amur Minerals, as competitors such as Serabi (LON:SRB) boat strong production figures for their third quarter.
Additionally, Resolute Mining Limited (LON: RSG) saw bumper fundamentals in the first half of 2019 with their trading update.
Amur will use the funds to repay a £625,000, loan owed to Riverfort Global Opportunities (LON: RGO) including interest.
Additionally, Amur Minerals have agreed to not make any further drawdowns under the convertible loan facility for at least three months.
The remainder of the funds are set to be spent on general capital and boosting working production facilities, the firm noted.
“The fundraise strengthens the company’s financial position as we continue our work on the TEO workstreams, and the follow on DFS, and will update the market with the progress of these various workstreams as and when appropriate,” Chief Executive Officer Robin Young said.
Young concluded “As previously noted in the interim accounts released on 30 September 2019, Amur continues to engage with potential strategic partners that have expressed an interest in advancing the Kun-Manie project,” Young added. “In light of the ongoing strength in the nickel price, the company hopes to update the market with positive progress in due course.”
Following admission of the subscription shares – expected on Thursday – Amur will have 836 million shares outstanding, which may cause concern for investors.
Young has expressed optimism to investors by alluding to the strength of the nickel price, telling investors that the company hopes to update the market in due course with positive progress.
Shares of Amur Minerals are trading at 2.33p per share. 4/11/19 11:06BST.