Metals One secures £5 million in funding and plans share consolidation

LONDON - Metals One PLC (AIM: MET1), a company developing strategic minerals projects in Finland and Norway, has announced a funding package comprising a convertible loan note (CLN) and a conditional equity fundraise, aiming to raise a total of £5 million. The company also plans to consolidate shares at a ratio of 10:1, pending shareholder approval.

The immediate financing comes in the form of a £600,000 CLN provided by Big Sky Management Limited, which is intended to serve as working capital for the company’s immediate needs. The CLN will convert into shares at the same price as the equity fundraise if the latter is approved and completed within 90 days. If not, the notes become repayable in cash or can be converted into shares at a 20% discount to the closing share price before conversion.

Following the CLN, the equity fundraise is expected to generate £4.4 million through a warrant instrument. This stage is contingent upon shareholder approval, with further details to be announced. The fundraise is structured through prepaid warrants and standard cash warrants, exercisable at 2p per warrant. If exercised, the cash warrants could bring in substantial additional proceeds.

The equity fundraise is subject to conditions including a general meeting to approve the share consolidation and warrant exercise, as well as the entry into a consulting agreement with MavDB Consulting LLC for £2 million, deducted from the fundraising proceeds.

In addition to institutional funding, Metals One aims to offer a retail option for existing shareholders to participate at the same pricing terms as the equity fundraise, with further details to be disclosed.

The combined proceeds from the CLN and equity fundraise are expected to fund the company’s existing projects and work programs for at least the next 18 months and provide capital for potential acquisitions.

Alastair Clayton, Non-Executive Chairman of Metals One, acknowledged the significant dilution for shareholders but emphasized the financing package’s role in securing the company’s future and diversifying its commodity exposure.

This financial strategy comes at a time when capital is scarce for junior resource exploration companies, particularly those with nickel projects. Metals One’s management believes this funding approach offers the best chance to recover value and enhance liquidity for shareholders.

The information in this article is based on a press release statement from Metals One PLC.

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