Balamara Resources announced today that it would undertake a renounceable rights issue next month in an effort to raise $5.26 million working capital.
Under the offer, all eligible shareholders will have the right to subscribe for three new shares for every 11 shares held, at an issue price of 7.5 cents per share.
Balamara shares last traded at 7.5 cents, having settled recently at around 8 cents after a tumultuous start to 2013 during which the price spiked to above 11.5 cents.
The current monthly average price is the lowest since December 2010, after which a plethora of positive exploration outcomes sent the price surging above 33 cents per share.
The issue will be fully underwritten by Patersons Securities and sub-underwritten by Ample Skill Ltd, a major Balamara shareholder with 19.9 per cent of the current stock.
There is no minimum subscription level.
Balamara managing director Mike Ralston said the proceeds from the issue would underpin ongoing exploration and feasibility activities at the company’s key base metals projects in Central and Eastern Europe, putting the company in “an exceptionally strong position”.
Balamara currently owns four sites in Montenegro, Poland and Bosnia-Herzegovina with major resources of zinc, copper, lead and silver.
The company is in the final stages of a consortium bid for the Togo carbonated phosphate project in West Africa, but received a blow last month when Deepak Fertilizers withdrew from the agreement for undisclosed reasons.
