Bluejay Mining PLC (LON: JAY) have announced a planned placing and share subscription on Wednesday, in order to raise funds for development projects.
The mining firm announced that the shares will be issued in order to raise funds for developing operations in Greenland.
Shares of Bluejay Mining dipped 0.69% after the announcement and are trading at 10p. 20/11/19 11:06BST.
BlueJay mining will raise £11.5 million through the issue of 115 million shares priced at 10p each.
Interestingly, the funds must be urgently required as the price offered reflected a 3.1% discount to the closing price on Tuesday evening of 10.32p.
Bluejay announced two waves of fundraising as highlighted in the update:
Phase one will entail a firm placing raising £7.5 million through the issue of 75 million shares.
Phase 2 will raise £4 million shares through a share subscription of 40 million shares by Greenlandic and Danish government investment funds, Greenland Venture AS and Vaekstfonden.
Bluejay followed a similar trend as competitors Thor Mining (LON: THR) Amur Minerals (LON: AMC) who made similar announcements a fortnight ago, in order to raise funds for new discovery operations.
Proceeds from the fundraise will go towards advancing the Dundas ilmenite project towards a mining licence grant, and the launch of maiden drilling campaigns at the Disko-Nuussuaq project and Langerluarsk project in 2020, both of which require government approval.
“We are delighted to have received strong support from two important Greenlandic and Danish Government backed institutions. This support demonstrates the mutual desire to grow the country’s mineral resource industry and we hope that Bluejay will be that vanguard,” said Chief Executive Officer Roderick Mcillree.
Shareholders may not be so optimistic, as this may devalue their holdings. However, if discoveries are made by Bluejay in their Greenland operations then this may act as a consolidation and see long term benefits.
BlueJay will have to act fast considering the pace of the mining sector where big timers such as Hochschild Mining (LON: HOC) and Serabi Gold (LON: SRB) have made significant gains in their respective updates.
