Rockfire Resources raises funds for "transformational" $20m deal

AIM-listed miner Rockfire Resources has announced a massive fundraising as it looks to take over two companies, Emirates Gold and Emperesse Bullion, as part of a reverse takeover.

Rockfire, which has a market cap of under £7m, is taking over the two companies for a total of $20m (£16.1m), in what is labelled as a "potentially transformational, value-enhancing transaction for shareholders".

It is buying the two companies from stakeholder Paloma, which currently owns 21.7% of Rockfire.

As part of the acquisition, Rockfire is undertaking a fundraise of £14.7m and a £3.5m subscription of new shares.

"The board of Rockfire has identified an exceptional opportunity to acquire two cash-generating businesses, which are entirely in line with the full value-add integration of precious and base metal exploration, development, production, refining and trading," said Rockfire's chief executive David Price.

"The proposed acquisition of Emirates and Emperesse would not only be transformational for our shareholders but would enable Rockfire to continue to grow as a global explorer and refiner of metals, all backed with positive cash flow."

Under AIM rules, the acquisitions constitute a reverse takeover and therefore Rockfire's shares have been suspended from trade in London. AIM rules stipulate that companies undergoing a reverse takeover require re-admission to the market because of an enlarged share capital.

The deal still requires the approval of shareholders.

"With the suspension of trading, we would like to reassure our shareholders that we have every intention of restoring the shares to trading on AIM as quickly as possible. However, our due diligence must be completed thoroughly, professionally and in accordance with the AIM Rules," Price said.