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(Sharecast News) - Firering Strategic Minerals said on Wednesday that it has strengthened its funding position after receiving a $1m settlement from Ricca and completing a 0.86m placing and subscription, as it advanced the ramp-up of lime production at its Limeco operation in Zambia.
The AIM-traded lime producer said the $1m payment represented full and final settlement of all debts and claims owed by Ricca, while the equity fundraising would support working capital requirements and continued progress at Limeco, which it described as its primary value driver.
It said the additional capital would also support its plans to increase its interest in Limeco and fund ongoing operational and product development.
"We are pleased to have received the $1m Ricca settlement along with completing the placing and subscription for an additional 0.86m, largely supported by existing shareholders," said chief executive Yuval Cohen.
"The injection of new capital comes at a pivotal stage for Firering as we look to increase our interest in Limeco, our primary value driver, as we push forward with operational ramp up and product diversification efforts."
Firering said the refurbishment of Limeco's second kiln had been completed, with work now focused on connecting it to the gasifier and feed system ahead of cold commissioning expected to begin in mid-January.
It added that the final container for kilns three and four was expected on site next month, allowing refurbishment and commissioning to begin once kiln two is operational.
Cohen said operational momentum continued to build, adding "with Kiln 1 performing reliably and Kiln 2 due for cold commissioning in the coming weeks, we are on track to increase output, producing both quicklime and hydrated lime."
He added that third-party interest has emerged in limestone powder produced directly from Limeco's tier 1 limestone resource, positioning Limeco as a long-term supplier to the mining, food and industrial sectors.
Firering said Limeco had expanded its product range to include hydrated lime, which carried higher margins than quicklime, and was assessing the installation of a larger automated hydrating system.
It said it was also progressing plans to install a milling circuit to produce a greater than 95% calcium carbonate powder, which it expected to achieve significantly higher sales values than limestone sold in aggregate form.
The company said commercial activity was accelerating under a new head of sales, with discussions under way with multiple long-term industrial partners.
Larger trial shipments of quicklime and hydrated lime had been delivered to customers in Zimbabwe and Zambia's Copperbelt, and Limeco had started the process to register as a supplier to one of the country's largest copper producers.
Firering also set out details of the placing and subscription, which raised 0.86m gross through the issue of new shares at 1.25p, representing a discount to the previous closing price.
The fundraising included subscriptions from Clearglass Investments and Premier Miton Group, which were treated as related-party transactions.
The board said, having consulted its nominated adviser, that the terms were fair and reasonable for shareholders.
Admission of the new shares to AIM was expected on or around 13 January.
At 1024 GMT, shares in Firering Strategic Minerals were down 3.7% at 1.3p.
Reporting by Josh White for Sharecast.com.