Ferrum Crescent placing to fund GoldQuest acquisition

Metals project developer Ferrum Crescent had a somewhat fatter wallet on Wednesday, having conditionally raised £0.65m before expenses through a placement of 403,846,154 new ordinary shares, and a direct subscription of for 96,153,846 new ordinary shares.

The triple-listed AIM, ASX and JSE traded firm said both the placing and subscription shares were at a price of 0.13p each, and both were oversubscribed.

Additionally, the company said it is issuing a further 9,807,692 new ordinary shares at the same price in settlement of fees to both Beaufort Securities for its corporate broking services, and TH Crestgate for its escrow arrangements over Ferrum Crescent’s option and sale agreement in respect of GoldQuest Iberica.

Ferrum Crescent’s board said it plans to use the net proceeds from the placing and subscription to fund the cash consideration payable when it exercises its option to acquire 100% of GoldQuest, as well as for general working capital purposes.

"We are delighted with the continued strong investor support for the Group's activities and its ongoing strategic renewal as a cost-effective, asset-backed exploration company leading to a strong over-subscription for this fundraising,” said Ferrum Crescent executive chairman Justin Tooth.

“Ferrum Crescent is now well placed to drive the capital value of our established Moonlight project in South Africa, particularly as the firming iron ore market this year should awaken interest in our circa 300m tonne Moonlight project, independently valued in June 2014 at a preferred value of $33m.”

Tooth said the company was also now in a good position to proceed with the GoldQuest option, and then proceed to advance the low-cost, high potential Toral project in Spain towards a credible mineral reserve for future consideration by potential acquirers.

“We look forward to providing updates on our progress both in Spain and in South Africa in due course,” he added.

It is expected that the placing, subscription and fee shares will be admitted to trading on AIM on 12 May.