Aim-listed Blencowe Resources has raised $500 000 (£392 350) from a specialist Africa-based investor through the issue of 7.8-million new ordinary shares.

The investor has undertaken extensive due diligence over the last four months and the current investment is viewed as an initial entry into the Orom-Cross graphite project, in Uganda, ahead of anticipated further investment as required, the company says.

The shares have been issued to the African investor under the company’s existing headroom.

Moreover, Blencowe has conditionally raised a further £2.5-million, resulting in the issue of 50-million new ordinary shares to an additional strategic investor.

The company is required to publish a prospectus on the basis that it will be issuing more than 20% of its issued share capital in a 12-month period.

Blencowe and its advisers are in advanced stages of finalising the prospectus, and the company anticipates publishing it this month.

The strategic investor has received investment committee approval and made a firm commitment to subscribe.

The subscription by the strategic investor is subject to the company issuing the prospectus, a general meeting by the company to approve certain resolutions relating to the issue of new ordinary shares, settlement of the investment and the issue and allotment of the new ordinary shares.

The subscription by the African investor is firm and not contingent on any investment by the strategic investor.

The subscription funds have been received from the African investor and Blencowe shall apply for the new ordinary shares to begin trading.

An application has been made for 7.48-million new ordinary shares to be admitted to trading on the official list and the LSE from February 9.

“As previously reported, we have already received $2-million in grant funding from the US International Development Finance Corporation (DFC) out of its approved $5-million grant. A further $1-million is expected from the DFC in the near term as the next milestones have been met.

“We now welcome a new specialist African investor to the register following the fundraise of $500 000 at 5p, which represents a healthy premium to the current market price and underlines their decision to invest for the long term after an extensive due diligence exercise. We reasonably believe that they will look to invest further as our relationship is built,” says Blencowe CEO Mike Ralston.

He adds that the strategic investor’s investment also being 5p a share underlines the value proposition offered by Blencowe and will provide the company with a good runway to complete the definitive feasibility study (DFS) this year.

“We are making rapid progress in derisking the Orom-Cross project, especially following the recent letter of interest received from the DFC to provide a funding solution for the build and development of Orom-Cross.

“We will continue to work closely with the DFC as we complete the DFS to ensure construction can commence at Orom-Cross in a timely fashion,” Ralston highlights.

“I believe it is testament of the quality of the Orom-Cross project that we have been able to secure funding partners like this at a time when the junior mining sector continues to face significant difficulties with respect to sourcing capital.

“We are hoping to deliver a net present value (NPV) in the DFS significantly higher than the post-tax NPV of $482-million achieved in the prefeasibility study and will keep shareholders updated on our progress,” he adds.