LONDON (ShareCast) - (Sharecast News) - Mining development company Ironveld has conditionally raised £1m before expenses, it announced on Thursday, to repay debt facilities and provide it with financial stability.
The AIM-traded firm said the funds were being raised via a proposed placing by Turner Pope Investments of a total of 333,333,333 new shares at a price of 0.3p, and a b oroker Option to raise up to a further £0.15m.

A further 204,508,295 new shares would be issued in settlement of existing loan facilities and certain other monies owed by Ironveld, and 260,299,999 new shares issued to certain directors in settlement of deferred salaries and fees at the placing price.

"The fundraise and issue of all the transaction shares are subject to ... shareholder approval at a general meeting of the company scheduled to be held on or around 14 December at which it is ... proposed to approve the subdivision following which each shareholder will hold the same number of ordinary shares but these will have a nominal value of 0.1p, rather than 1p, each," the board said in its statement.

"If approved, the resulting new ordinary shares are expected to be admitted to trading on AIM on or around 15 December."

The company said the placing price represented a discount of about 53.8% to the closing mid-market price of 0.65p per share on 25 November.

It said the net proceeds of the placing would be used to repay around £0.11m of existing debt facilities and interest.

They would also be used to provide financial stability to Ironveld following the recent mutual agreement to lapse the transaction with Inclusive Investment Group (IIG), as it seeked to advance negotiations on the development of its magnetite project with alternative partners, as well as for general working capital purposes.

"The company has also agreed to settle all liabilities arising from the loan facilities announced in February totalling £0.24m by way of capitalisation for 78,333,332 new shares at the placing price, whilst at the same time extinguishing 26,000,000 warrants exercisable at 1p issued alongside such loan facilities," the board said.

"As previously announced, bridge funding advanced by IIG during 2020 totalling approximately $0.65m plus interest will principally be settled by 102,174,963 new ordinary shares at 0.42p per share, the outstanding sum being reduced by a cash repayment of $0.15m (£0.11m)."

At 1540 GMT, shares in Ironveld were down 41.54% at 0.38p.

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