LONDON (ShareCast) - (Sharecast News) - Producing mineral company Strategic Minerals has raised £0.89m before expenses by way of a placing and subscription of 63,571,425 new ordinary shares at a price of 1.4p each, it announced on Tuesday.
The AIM-traded firm said the proceeds of the placing would be used primarily to facilitate the closing of the purchase of the balance of shares in Cornwall Resources (CRL), as well as to provide working capital for the Leigh Creek Copper Mine project.

It said the placing remained conditional on admission of the new ordinary shares to trading on AIM.

The company said the placing was supported by its largest existing shareholder, the Manners family, with participation by three directors, two employees and a consultant.

It explained that the placing was required to allow the intended reorganisation of funding for the CRL acquisition.

The proceeds of the placing were primarily intended to partially fund the settlement of the CRL transaction, which the firm said it intended to settle on 27 June, albeit with alternate funding arrangements currently being finalised.

It added that the proceeds would also be used to provide working capital for the Leigh Creek Copper Mine project, which was expected to deliver "significant" cash flow following the full restart of production, expected in the first quarter of 2020.

Management said it still considered that payment of $4.07m, owed to the company by the major Cobre client, was "imminent" and could be received "at any time".

"This modest placing has been undertaken as we await the anticipated receipt of over $4m from the Cobre client," said Strategic Minerals chairman Alan Broome.

"SML appreciates the continued backing of our largest shareholder, as well as from another large, existing investor.

"The remaining participants in the placing consisted of the board and the wider SML team."

Broome said the board considered all participants to the fund raise were likely to be long term shareholders, cognisant of the expected future value of the company.

"We remain in close contact with our Cobre client and believe payment may occur at any time.

"However, we are carefully preparing to progress a claim for substantial potential lost profits, should payment not be forthcoming in the near future."

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