Metals Exploration has obtained commitments to raise approximately US$10.295 million through a placement. The company has chosen to raise additional finance due to ongoing delays in realising revenue from the sale of gold from its Runruno project in the Philippines.

The AIM-listed company is issuing the shares at 5.0 pence each with new institutional shareholders largely putting up the money and certain existing shareholders also participating.

The funds will also provide working capital for the continued ramp-up of the Runruno processing plant which is proceeding satisfactorily.

Discussions with the current project lenders regarding the rescheduling of the Runruno debt facility are continuing. A further waiver has been obtained to delay the principal sum of US$15 million, previously due on June 30, 2016 to be repaid on the earlier of November 30, 2016 or on successful rescheduling, to be paid over the revised principal repayment schedule.

To date US$324,000 of interest on the deferred principal repayment has been paid to the lenders and a further US$76,000 is due to be paid on November 30. Runruno has a US$75 million debt and $8 million cost overrun facility.

The placing shares have been subscribed for by MTL (Luxembourg) Sarl, Runruno Holdings Limited, Investec Wealth & Investment Ltd, Jarvis Nominees, Lynchwood Nominees Ltd, Sector Investments Ltd, Smith & Williamson Investment Management LLP, Winterflood Securities Ltd and HSBC Marking Name Nominee.

Following the placing, MTL Luxembourg, the vehicle of property development siblings the Candy Brothers, will have a 46.86% stake.

After being hit by a number of delays earlier in the year, Metals Ex says the processing plant at the Runruno mine is now ramping up satisfactorily. First gold was poured in June but the original plan was for Runruno to have started production late last year.

Metals Ex executive chairman Ian Holzberger said, “The Board of Directors and the company are extremely grateful for the continued support provided from its shareholders in this placement and over the last several years. Their support for the company and the project is greatly appreciated.

“We also are pleased to welcome a new shareholder, a major sector specialist institutional investor, to the company’s register. The funds raised will significantly strengthen the company as it focuses on the successful ramp-up of the Runruno processing plant to design throughput.”

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