Stellar Diamonds said capital markets in the UK are proving “extremely” difficult to raise funds for junior mining companies.
Company chief executive Karl Smithson said the market capitalisation of Stellar during the last six months hovered around the $2 million level, which provided additional challenges of raising capital to develop the mine in Sierra Leone.
He, however, said that a possible share offer to acquire Stellar by ASX-listed Newfield Resources, at a “significant” premium for the company’s shareholders, was received which, if successful and alongside a planned fundraise by Newfield, would also bring the required project development capital for Tongo-Tonguma.
“Alongside any possible offer for the Company and subsequent to the period ended 31 December 2017, Newfield Resources has advanced to Stellar an unsecured $3 million loan…,” said Smithson.
The funds were meant for the front end engineering design programme, mine plan drilling, payment of certain licence fees, creditors and transaction fees.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished