Exploration and development firm Ironveld (LON: IRON) has witnessed a surge in its share price on Friday after it announced a major investment agreement to raise £5.6 million via a share subscription.
Ironveld will issue 561.5 million new ordinary shares at 1p per share, representing a premium of 90.5% to the mid-market price of 0.525p on 29 March 2021, the last trading day before the announcement that Ironveld was in discussions that might lead to a material transaction.
The shares issued represent 29.9% of the enlarged issued share capital of the company.
Ironveld and Grosvenor have agreed that Grosvenor will nominate two non-executive Directors to Ironveld's board following completion of the subscription.
Martin Eales, CEO of Ironveld, said:
“We are delighted to be able to announce this transaction today, which has taken a great deal of hard work by the teams on both sides over many months. Ironveld is issuing new equity at a large premium with a supportive new partner. Grosvenor is taking a substantial stake in Ironveld and is focused on ensuring near-term development of Ironveld's project for the benefit of all shareholders.”
Ironveld's share price has surged 37% on the news to 0.84p, its highest price since June and adding to its gains for the year.
Ironveld shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Ironveld shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies
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Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.