Aim- and AltX-listed Shuka Minerals has raised £1-million through a placing of 25-million new ordinary shares at a placing price of £0.04 apiece.

Participants in the placing will be issued one warrant for each placing share, exercisable at $0.08 per ordinary share, which is valid for three years from the date of admission.

The investor warrants, if exercised in full, would result in the company raising an additional £2-million.

The company has granted Tavira Financial, which undertook the placement, 1.5-million broker warrants, exercisable at £0.04 for a period of three years from admission, as part of their remuneration for arranging the placing.

Shuka intends to use the funds from the placement to advance exploration work this year.

Meanwhile, Shuka confirms it received the last funds from Gathoni Muchai Investments related to an increased loan agreement entered into in June last year.

The last £815 000 tranche received allows Shuka to settle the cash consideration of its acquisition of Zambian mining company Leopard Exploration and Mining, and thereby the Kabwe zinc mine, in Zambia.

The Kabwe mine was previously operated by Anglo American and Zambia Consolidated Copper Mines for 88 years before its closure in 1994 owing to commodity price factors.

The company plans to undertake confirmatory and step-out diamond drilling, build a sample laboratory on site, conduct airborne and ground magnetic surveys, conduct geophysics and geotechnical studies, as well as upgrade infrastructure on site.

By the end of this year, Shuka aims to have further defined the orebodies at Kabwe and refine exploration targets beyond the existing licence.

Shuka is also undertaking dewatering and repair work at the Rukwa coal project, in Tanzania, with the company planning to acquire two new loaders and a new excavator. The project requires an investment of $150 000 to achieve a planned staged ramp-up to about 5 000 t a month of washed coal.

A further capital investment of $1-million can enable a throughput increase to more than 7 500 t a month; however, Shuka would only consider such a ramp-up once there is stable cash flow and revenue generation from Rukwa.

The company is in the process of finalising offtake agreements with East African and Rwandan cement plants for the coal produced at Rukwa.