Shares of metals and minerals producer, Xtract Resources (LON: XTR) are falling on Thursday after the company revealed that its broker, Novum Securities, conditionally raised £5 million following the placement of 111,111,111 new Ordinary Shares at 4.5p per placing share.
The shares represent 17.9% of the company's currently issued ordinary share capital, with the price per share at a 24% premium compared to the 10-day volume-weighted average price of 3.63p.
Xtract said the proceeds raised will be used to further develop its exploration projects in Australia and in Zambia and provide additional working capital.
They will also assist in fast-tracking the Eureka project in Zambia with drilling expected to commence there within the coming weeks.
Xtract shares are down 5.59% at 4.82p following a recent substantial rally that saw it climb from 2.50p per share to highs of 9.20p. Even at today’s price, its shares are up 96% in the past week and over 378% in the past year.
“The Company has elected to raise the money based on the very pleasing drilling of the first hole in the Phase One diamond drilling programme at the Racecourse Mineral Resource on the Bushranger copper-gold exploration project located in the Lachlan Fold Belt, New South Wales, Australia as reported over the last week,” commented Colin Bird, Xtract’s executive chairman.
“The drilling results demonstrated a significant mineralised plunge in excess of our expectations, requiring more extensive strike drilling to prove-up width and the tonnage. The drilling programme will be important to identify the copper grades as well as establish gold grades on the various horizons,” added Bird.
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