Baobab falls as it draws on debt facility

Baobab Resources, the Mozambique-focused iron ore explorer, fell hard on Wednesday after it created millions of new shares.

Baobab Resources, the Mozambique-focused iron ore explorer, fell hard on Wednesday after it created millions of new shares.

The firm's stock fell 10% after it drew down £1.02m of its £17m equity line facility with Dutchess Opportunity Cayman Fund.

Under terms of the facility, the company has now allotted 7.14m new shares to Dutchess at a price of 15.25p each.

Baobab said the funds would be used to accelerate certain aspects of its Definitive Feasibility Study of the company's flagship pig iron project at Tete.

Following this drawdown the outstanding balance of the facility will be £13,825,800, it added.

Chairman, Jeremy Dowler, said the money would allow Baobab to accelerate time critical components of the impending study and in particular seasonal baseline studies and metallurgical drilling.

"The additional capital will also enable the company to move rapidly on any corporate opportunities that may arise," he said.

"The funding was completed at a pre-commission value of 15.25p which is substantially higher than Baobab's previous funding at 8p per share and leaves the company with a significant cash balance at the start of 2013".

Recommended

The top funds to invest in
Funds

The top funds to invest in

As market volatility and recessionary fears continue, here are the most popular funds, stocks and trusts investors are putting their money into
2 Mar 2023
The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
27 Feb 2023
The outlook for Shell shares is mixed, despite bumper profits
Energy stocks

The outlook for Shell shares is mixed, despite bumper profits

With profits surging, it looks as if Shell is on a roll, but the company’s growth from here is hard to see as Rupert Hargreaves explains.
6 Feb 2023
The top ten dividend stocks in the FTSE 250
Share tips

The top ten dividend stocks in the FTSE 250

The average FTSE 250 dividend yield is around 4%, but many stocks yield much more. Rupert Hargreaves picks the best FTSE 250 stocks for income investo…
17 Jan 2023

Most Popular

Government plans could see NS&I boost interest rates
Savings

Government plans could see NS&I boost interest rates

The government-backed bank has a new funding target, which could prompt it to boost the rates on its Premium Bonds, ISAs and bonds.
16 Mar 2023
Share tips of the week – 17 March
Investments

Share tips of the week – 17 March

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages
10 Mar 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

As energy prices slide, the government has now extend its energy bill support from April. But what will you bills look like later this year? We have a…
15 Mar 2023