Metals Exploration plc has obtained commitments to raise approximately US$5.0 million in a placement. The funds will be used to fill a liquidity gap during the resumed commissioning and ramp-up of production facilities at the Runruno Gold Project in the Philippines.

During 2015 the company raised US$5 million in a private placement to existing certain sophisticated shareholders, GB£3.0 million in an open placement and US$5.0 million by way of a debt facility. Earlier this year it raised a further US$6.2 million from a private share placement to certain sophisticated shareholders.

It was announced by the company on September 18, 2015 that the contributions from the 2015 share placement would provide sufficient capital to complete the commissioning of the process plant and residual storage impoundment at the Runruno project and until it commences operations through to realising self-sustaining cash flow.

It was further announced that the contribution received from the debt facility would provide a contingency facility should the permitting process delay the project entering into commercial operations during October 2015. The funds received from the open offer were announced as not being critical to the requirements of the project at that point in time.

The company announced in the 2016 placement that it “expects that following receipt of funds from the placing and subject to achieving a satisfactory debt restructuring agreement with the lenders as well as clearance to start operations from the MGB, it will now have in place sufficient working capital to continue until it commences operations through to realising self-sustaining cash flow.”

Unfortunately the project has suffered from further time delays which have inhibited it from realising sustainable cash flows resulting in the company having to raise additional working capital funding.

The debt restructuring discussions have taken longer than expected; the mill ramp-up has been delayed due to the mill being out of operation, causing a delay receiving revenue from gold sales; and there have been ongoing negotiations regarding conditions attached to the release of US$6.0 million in working capital prefund.

Metals Ex says that the mill has been operating semi-continuously since July 15 and the gold recovery circuits are being tested and debugged again.

The company’s executive chairman Ian Holzberger said, “It is pleasing to have the processing circuits being commissioned and ramped up once again but it was unfortunate the issue with the mill occurred. We are confident this commissioning issue has now been resolved with the support of CITIC, the mill provider.

“The project has been re-established on the commissioning and ramp-up schedule which was interrupted due to the mill downtime. All key operations in the processing plant are in commissioning with pleasing results being recorded. It is expected that the project will ramp up to design specifications within the next three month period.”

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