Irish mining company Ormonde Mining will be stepping up its gold-mining operations in Spain with an "aggressive programme" over the next 18 months.
As well as seeking admission to the London AIM, the firm will raise €4 million in a share placing to fund its five properties throughout Spain.
The board announced yesterday that it will sell 30 million new ordinary shares at 10p (14.4 cent) a share.
This amounts to €4 million after costs, and represents approximately a quarter of the existing issued share capital of the company.
Currently listed on the Irish Stock Exchange, Ormonde closed at 16 cent yesterday, down 5.88 per cent.
A spokesman for the company said that the offer was significantly oversubscribed, to the tune of €7 million.
"While this is clearly a good sign, we felt that the consequences of raising that much would lead to a dilution of shareholders," he said.
"This amount will give us funds to run an aggressive programme in all our properties."
The company hopes to be admitted to the AIM by April 19th to "facilitate its intended growth from an exploration and development company into a gold producer".
Almost 50 per cent of Ormonde's shareholders are UK based, and the board feels that an AIM quotation will increase trading liquidity and enhance the attractions of investment.
"While the Irish market has served us very well, we believe that this will significantly improve our visibility and help us to grow," said the spokesman.
"With so many of our shareholders now based in London, it makes sense to represent them there."
Ormonde began its Spanish operations with the restructuring of the company in 2001. Its first property, at Trives in Galicia, is still active, and as recently as January 31st, it purchased a series of several advanced gold properties in the Salamanca region of western Spain, with a combined area of 720 sq km.
It hopes to bring its main deposit in La Zarza, near the Portuguese Algarve, to a mining situation within two years.
The primary shareholder is JP Morgan Chase with 8.2 per cent, followed by HSBC with 6.7 per cent.
The shareholders are divided almost 50-50 between Ireland and the UK.
Ormonde will keep its Irish listing, currently on the Exploration Securities Market of the Irish Stock Exchange, but it will be moved to its forthcoming replacement index, the Irish Enterprise Exchange (IEX).
The share placing is conditional on admission to the IEX and the AIM and is subject to shareholder approval.
The funds for the placing have been jointly raised by Davy, Ormonde's current sponsor for the Irish Stock Exchange, and the recently appointed Seymour Pierce of London.
