North River secures $12m to restart Namib mine, shares shoot up
North River Resources (LON:NRRP) shares were up 28% at the market open Friday on the announcement it secured equity funding of up to US$12 million that will be used to re-open its Namib lead in zinc mine in Namibia and grow the business via acquisitions.
The deal with Greenstone Resources, said Managing Director Martin French in a statement, will allow North River to fast-track the mine development and provides “a clear pathway to production,” expected in 2015.
Under the investment agreement, Greenstone has subscribed for an initial tranche of US$2.8 million worth of North River shares at 0.6 pence, and has agreed to provide up to US$8.9 million of equity in three further tranches at increasing prices to underpin growth in shareholder value.
Experts welcomed the news. Sheldon Modeland and Paul Renken, senior analysts at London investment bank specializing in natural resources, VSA Capital Ltd, qualified the addition of Greenstone as a “great endorsement of management, the business plan and the deposit,” adding that it reduces the project funding risk.
Earlier this week North River released a mine development plan, which put the capital expenditure required to bring Namib into production at $25 million.
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