Tungsten West plc has today started an open offer to raise up to £2 million for costs at the Hemerdon tin-tungsten mine in Devon.
TRANCHES
The open offer is at an issue price of 3 pence per new ordinary share, with up to 66,666,666 new ordinary shares offered to existing shareholders.
The company also confirmed that the £6.95m raised, before expenses, from convertible loan notes (CLNs) will be in two tranches of £3.975m and £2.975m.
Substantial shareholder Baker Steel has conditionally agreed to purchase £1.2m of the first and second tranche CLNs.
Tungsten West may offer up to a third tranche of £2m principal CLNs to a third party procured by shareholder Lansdowne which took part in the CLN fundraise.
If this is rejected, the company may offer the CLNs to the existing note purchasers.
In the event all parties refuse to take up the notes, the company may offer the third tranche notes to any other third party it may procure by itself or through the joint brokers.
The fundraise is subject to shareholder approval at the general meeting on 8 June 2023.
USES
In April, Tungsten West said it had started major cost cutting alongside the fundraise to meet contractual liabilities and pay for “significant” annual expenditure at Hemerdon.
The placing will fund the business through the planning and permitting process and completion of the required project funding.
The company added that funds raised would be insufficient to see the company through to cash generation.
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