Polymetal snaps up 22% stake in Chesterfield

FTSE 100 miner Polymetal International has acquired a stake in Chesterfield Resources, causing shares in the copper and gold exploration firm to surge 25%.

The blue chip is investing £2.1m in Chesterfield in return for a 22.5% strategic stake, with 23.33m shares issued at a price of 9p per share, a 16% discount to Wednesday’s closing price.

The deal will make Polymetal - one of the world’s ten largest gold miners - Chesterfield’s largest shareholder and a strategic partner. A representative is expected to take a seat on Chesterfield’s board.

Martin French, executive chairman of Cyprus-focused Chesterfield, said: "We are an ambitious young company and this strategic investment represents an important step in our growth trajectory."

As at 1100 GMT, shares in Chesterfield were up 25% at 13.5p. Polymetal's shares were ahead 3% at 1606.5p.

The financing will be used to fund the next phase of exploration of Chesterfield’s licence district in Troodos West, in Cyprus. Chesterfield is focused exclusively on the exploration of the Mediterranean island.

Chesterfield is also raising an additional £400,000 through the private placement of 4.44m shares at 9p per share to new and existing investors.

Yuen Low, analyst at Shore Capital, said: "According to Chesterfield’s interim financials, the company ended June 2020 with just £0.3m of cash. Today’s proceeds will therefore be very welcome.

"Polymetal’s splurge is in line with its strategy of investing in mining corporations in its regions of operations, and to increase its copper exposure."