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Stellar Shares Fall After Funding Deal

Feb 27, 2017 7:53 AM   By Rapaport News
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RAPAPORT... Trading resumed in Stellar Diamonds’ shares on Monday following a six-month suspension, after the company completed fundraising for a mining project in Sierra Leone.

The issue of 5.9 million new shares at a price of $0.07 (GBP 0.055) per share will raise proceeds of $402,700 (GBP 324,500), the miner said. In addition, the company plans to raise a further $310,246 (GBP 250,000) through an open offer and $24,820 (GBP 20,000) by way of a director subscription.

Funds from the issue of shares and the open offer will go toward completing an agreement with Octea Mining under which Stellar will operate Octea’s Tonguma mine in Sierra Leone and pay a proportion of revenues back to the owner. Stellar had originally planned to acquire the mine, but opted out of this move.

The initially proposed acquisition of Tonguma was deemed to be a reverse takeover and would have required shareholder approval. For this reason, Stellar’s shares were suspended on the London Stock Exchange’s Alternative Investment Market last August pending publication of a document outlining the deal.

Shares in Stellar fell by more than a quarter in early trading Monday.
Tags: London Stock Exchange, mining, Octea Mining, Rapaport News, Sierra Leone, stellar, Stellar Diamonds, Tonguma
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