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(Sharecast News) - GCM Resources announced the conditional raising of £1m before expenses through a placing of new shares on Friday, with the proceeds to be used for working capital as it continued to progress its Phulbari Coal and Power Project in Bangladesh.
The AIM-traded resource explorer and developer said it issued 16,666,667 new shares at a price of 6p per share.
It said the issue price represented a discount of around 20% to the closing bid price of 7.5p on 15 January.
Net proceeds were expected to be about £0.94m after expenses, excluding VAT.
GCM said the placing was conducted on a non-pre-emptive basis under existing authorities granted at the company's general meeting in December.
The new shares would represent about 4.72% of the enlarged share capital and would rank equally with existing ordinary shares.
Clear Capital Markets Corporate Broking acted as sole bookrunner on the placing.
The firm said the funds would be used to support ongoing operations, including corporate overheads, legal and advisory costs and general administrative expenses.
It added that the placing would help ensure it remained in a financial position to advance its broader strategic objectives.
GCM said it continued to work towards advancing the Phulbari Coal and Power Project in north-west Bangladesh, which remained subject to securing the necessary government approvals.
The company noted what it described as a shift in momentum within Bangladesh towards the use of domestic natural resources, particularly ahead of national elections scheduled for February, although it cautioned that it provided no certainty regarding the project's development.
Under the terms of the placing, Clear Capital was also granted one million warrants exercisable at 6p per share for a period of three years from admission.
The warrants would not be admitted to trading on AIM.
Application had been made for the new shares to be admitted to trading on AIM, with admission expected at 0800 GMT on 21 January or shortly thereafter.
Following admission, GCM said it would have 352,958,790 ordinary shares in issue, each carrying one voting right, with no shares held in treasury.
At 1232 GMT, shares in GCM Resources were down 18.75% at 6.5p.
Reporting by Josh White for Sharecast.com.
