Eurasia Mining (LSE:EUA) has successfully raised $15m through a private placement to help fund its ongoing Rosgeo JV mining project. Investors had a somewhat muted response to the announcement. And due to new shares being issued, the subsequent dilution effect triggered a slight decline in the EUA share price. However, over the last 12 months, the stock has climbed just under 40%.
The details
On Monday, the early-stage mining business announced that 41.5 million new shares had been sold to institutional investors at 26p per share. In addition, Eurasia mining also sold new equity warrants that grant these institutions the right to buy another 41.5 million shares at a price of 26p within the next three years.Â
The raised capital has enabled the company to boost its cash position from $20m to $35m. The plan is to deploy the newly acquired funds to further finance its joint venture with Rosgeo in developing a collection of open-pit mines. These mines contain various battery-essential metals, including palladium, and platinum, among others.
What’s next for the EUA share price?
Management has decided to limit further private equity placements to mitigate the effects of shareholder dilution. In total, an additional 83.1 million shares have been created. By comparison to the 2.9 billion already in circulation, this places the dilution effect to be around 2.9%. However, as the warrants currently remain unexercised, the full extent of this dilution effect has yet to take place.