PERTH (miningweekly.com) – Junior Kogi Iron will raise some $5.8-million through a private placement agreement with institutional investor Bergen Global Opportunity Fund.
Under the agreement, Bergen will subscribe for some $50 000 of Kogi shares on a monthly basis, with the tranches having the capacity to increase to $250 000, by mutual consent.
Kogi chairperson Ian Burston said on Monday that the investment would provide the company funding for operational expenses and the ongoing development of the Agbaja iron-ore mine and integrated steel project, in Nigeria.
“The board has opted to fund the company’s operations through the staged funding, given the proximity to development of Agbaja. This conservative approach to funding has the potential to limit dilution to the shareholders and thus maximise shareholder value.
“At this stage, it makes more sense to have this flexile facility rather than pursue a dilutive equity raising,” Burston said.
Kogi cannot issue more than 55.4-million shares without shareholder approval, and the company said on Monday that it would seek this within the next two months.
The first tranche placement was expected during the week of October 17.