Strategic Minerals Raises £1m in Oversubscribed Placing
Why we think this is bad
The 25% discount on the placing price indicates low investor appetite for the company's shares, which is a concerning sign for a micro-cap company. While the raise amount is relatively small, the significant discount will result in dilution for existing shareholders. The potential upside of the Redmoor project needs to be weighed against the ongoing risks facing the business.
Key Points
- Strategic Minerals raises £1m through an oversubscribed placing
- Placing price of 0.3 pence per share represents a 25% discount to the previous closing price
- Net proceeds to be used for the Redmoor project and working capital
Summary
Strategic Minerals Plc (AIM: SML) has successfully completed a £1m placing, which was oversubscribed. The placing price of 0.3 pence per share represents a 25% discount to the previous closing price of 0.4 pence. The net proceeds will be used to progress activities at the Redmoor Tungsten-Tin-Copper Project in Cornwall and for working capital purposes. While the oversubscribed nature of the placing suggests some investor appetite, the significant discount indicates low confidence in the company's shares.