Arc Minerals (LSE:ARCM) sat at 4.1p with a £23.5m market cap this morning after announcing a £2m fundraising underpinned by two new institutional investors.
The firm, which rose 3.1pc on the news, placed shares at 6.5p each, a 12.5pc premium to its 4p closing mid-price over the previous trading day. Each share purchased in the placing comes with a warrant entitling the holder the right to buy an additional share at 6.5p within 36 months.
Proceeds from the placing will be used to fund exploration and development work at Arc’s Kalaba Copper-Cobalt project in Zambia and for general working capital purpose.
Kalaba’s licence covers nine of 30 high priority targets ranked by a previous JV in the area operated by Anglo American and is near First Quantum’s Sentinel and Kansanshi and Barrick’s Lumwana mines. The project has an existing near-surface estimated copper-cobalt oxide resource of 16.59Mt at 0.94pc copper and a historical exploration target of 150Mt, making it one of the most significant projects of its type in Zambia.
Arc’s executive chairman Nick von Schirnding said the firm carried out the placing after being approached by a European family office and a South Africa-based institution.
Numerous members of Arc’s senior management team also took part in the placing. These included Schirnding, who purchased £100,000 worth of shares to bring his total stake in Arc to 2.11pc. Chief financial officer Chuck Forrest, chief operating officer Vassilios Carellas, and non-executive directors Don Bailey, Brian McMaster, and Jonathan de Thierry also took part, collectively purchasing £33,000 in shares.
Schirnding said: ‘Raising funds at a premium to the share price underscores the quality of our Zamsort copper and cobalt asset and I am also pleased that the majority of the board and management participated in the raise. I look forward to be able to announce further drill results soon.’
Arc is currently working towards production at Kalaba. It expects processing to take place at the site’s commercial-scale demonstration plant, which is approximately 75pc complete. As it stands, the business has already stockpiled 10,000 tonnes of screened ore grading 2.1pc copper and 0.3pc cobalt at the site. It is also in the process of building a new management team at Zamsort who will be undertaking a full assessment of current operations including historical exploration data and optimising the plant
Arc also owns a 100pc interest in Casa Mining, a private company that has a 71.25pc stake in the Akyanga gold deposit in the DRC. At the end of July, the business rose 12.5pc after reporting that a JORC mineral resource for Akyanga had almost doubled to 3m ounces of gold averaging 2.16 grams per tonne.