West Africa-focussed diamond development company Stellar Diamonds announced its unaudited interim results for the six months to 31 December on Monday - a period in which it completed a placing of £0.33m and an oversubscribed open offer raising £0.2m.
The AIM-traded firm made nil revenue during the period, as it had in prior periods, and saw its loss before tax widen to $0.94m from $0.66m a year earlier.
It did successfully dispose of its Guinea assets for gross proceeds of $1.25m during the period, as well as repaying its $1.24m convertible loan note and issuing a $1.34m convertible loan note.
Amendments to its $1.65m and $1.34m convertible loan notes were made, with repayment longstop dates extended to 30 April and 31 March respectively, for the completion of the Tongo-Tonguma tribute mining agreement and securing of the project funding as defined in the note agreements, the board explained.
Additionally, a $3m unsecured loan was received from Newfield Resources post-period, with the funds used towards the commencement of the front-end engineering design, mine plan drilling, the payment of certain licence fees, certain creditors and transaction fees.
On the operational front, Stellar closed the Tribute mining and revenue share agreement with Octea Mining over the Tongo-Tonguma project since the period ended.
An Environmental Licence was issued for Tongo, which the board said paved the way for the issue of the large-scale mining licence subject to the licence fee payment being made.
There was also a post-period announcement of a possible offer for the issued and to-be-issued share capital of Stellar by ASX-listed Newfield Resources, with the intention to fund the commercial development of the Tongo-Tonguma mine.
"The interim reporting period has primarily been focussed on sourcing the necessary funding to bring the Tongo-Tonguma project into production," said chief executive Karl Smithson.
"The capital markets in the UK have proven extremely difficult to raise funds for junior mining companies in recent years.
"Furthermore, the market capitalisation of Stellar during the last six months hovered around the $2m level, which provided additional challenges of raising capital to develop the mine in Sierra Leone."
However, Smithson said the board was "pleased to report" on 1 February the possible share offer to acquire Stellar by ASX-listed Newfield Resources, at a significant premium for Stellar shareholders.
It successful, and alongside a planned fundraise by Newfield, the transaction would also bring the required project development capital for Tongo-Tonguma.
"Alongside any possible offer for the company and subsequent to the period ended 31 December, Newfield Resources has advanced to Stellar an unsecured $3m loan with which to primarily commence the FEED programme, mine plan drilling and, as a result of the recent completion of the tribute mining agreement, payment of Tonguma mining licence fees of $1.25m - covering the period up to July."
Smithson said the loan would also be used to pay legal and corporate financial advisor costs, including those related to the possible offer for the company.
Working capital would therefore remain constrained as the board continued discussions with Newfield Resources regarding the possible offer.
""In addition, Stellar completed the disposal of its Guinea assets and three Guinean subsidiary companies to BDG Capital in return for an overall payment of $1.25m, meaning Stellar can focus its resources on the Tongo-Tonguma project in Sierra Leone."