Sotkamo Silver (NGM: SOSI) said that it received 49.1 million SEK before issue costs in its recently conducted preferential and directed share issue. The issue was hardly well done and the market situation also contributed to the fact that the subscribed amount was only about 30% of the total offer. The share is currently listed on the Nordic Growth Market exchange in Stockholm, Sweden, where it has been under severe pressure today.
The company said it wanted to get more Finnish investors before parallel (secondary) listing on NASDAQ OMX Helsinki Stock Exchange expected to commence on or about 9th July 2012 in addition to securing around half of the capital needs for development of its main holding. The poor result affects the investment plan while still allowing further development of the project, the Board of Directors concludes. The fact that the issue directed Finnish investors but was nonetheless done in Swedish kronor, haphazard marketing coupled with the fact that related documents were in Swedish only and the rather complex terms played a part as well in that those subscribing were almost entirely the ones already committed to that in advance. Apparently there is also a reverse split upcoming. The company will look for ways to attain further financing.
The company owns and plans to operate Taivaljärvi silver mine in Sotkamo, Finland. Taivaljärvi mineralisation extends to at least 1000 metres below surface according to the company. The mineralisation is around half a kilometre long and perhaps one hundred metres wide. Feasibility study conducted by Armstrong International and reviewed by Outotec Oyj OMXH: OTE1V has the mine’s total proven and propable reserves of 8 228 494 ounces of silver as well as 19 301 tonnes of zinc, 9 511 tonnes of lead and 23 748 ounces of gold in around 3 million tonnes of ore with the corresponding grades being 86.11g/t, 0.65%, 0.32% and 0.25g/t. Sotkamo Silver said few weeks ago that it found an error in Armstrong’s calculations that overvalued zinc revenue but the revision nonetheless did not affect financial viability of the project. The planned starting of mining operations is at least a year or two away.
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