Argos Resources raises $0.55m in bid to extend Falklands licence

Argos Resources has conditionally raised $0.55m (£0.4m), it announced on Wednesday, as part of its bid to extend licence PL001 in the Falkland Islands.

The AIM-traded firm said the funds were raised through the issue of 14,428,001 subscription shares at a price equivalent to 2.75p each, by certain new shareholders, and executive chairman Ian Thomson.

It said it remained engaged in discussions with counterparties who had expressed an interest in participating in drilling on licence PL001, which is a production licence covering around 1,126 square kilometres in the North Falkland Basin.

In order to enable the company to progress discussions with potential partners, on 10 February the board requested a 12 month extension to the second term of the licence from the Falkland Islands government, with it currently due to expire on 1 May.

The government had said that as part of it considering the request, the company needed to demonstrate that it had, or would secure, sufficient funds to meet its working capital requirements until at least the period of the extension requested.

“The net proceeds of the fundraise, along with the company's existing cash of £0.24m at 25 March, will provide working capital for the group until at least 1 May 2022, being the requested extension date of licence PL001,” said executive chairman Ian Thomson.

“Part of the working capital raised will be retained in US dollars to meet the company's anticipated dollar expenditures, and part will be converted to pounds sterling.”

At 1013 BST, shares in Argos Resources were up 11.11% at 3p.