Mining

Lucapa to raise A$6.7m in rights issue, share placement to find source of Lulo riches

DeBeersDiamonds e1554823577736 696x392 1

LUCAPA Diamond Company plans to raise about A$6.7m in order to fund exploration of its Lulo deposit in Angola.

The funds will be raised through a A$2.8m share placement with “… sophisticated institutional investors”, it said today. Some 25.9 million shares will be issued at a price of 11 Australian cents per share – an 13% discount to the firm’s 30-day volume weighted average share price.

The share placement does not require shareholder support.

In addition, Lucapa announced a 1:14 rights issue in which it will sell about 35.7 million shares raising a total of A$3.9m. The firm’s directors said they intended to take up their rights.

“Lucapa intends to use the funds from the placement and rights issue to advance the Lulo kimberlite exploration program and for general working capital and corporate purposes,” it said today in an announcement.

Shares in the company fell 23% to just above the issue price of the share placement of about 12 Australian cents/share valuing the company at A$57.4m. The company announced a trading halt last week ahead of the announcement.

The exploration program was to discover the “… hard-rock primary source or sources of the high-value alluvial diamonds” at Lulo, it said.

Stephen Wetherall, MD of Lucapa Diamond, said the company had funded previous expansions and exploration activities from cash flow whilst also maintaining dividend payouts during this time. This included a $12m expansion of its alluvial mining operations which involved the purchase of new mining fleet.

The expansion was designed to deliver a 50% increase in carat production in 2020, the company said.

Source: miningmx.com

Follow us:
Visited 8 times