Shares in Aim-listed miner Premier African Minerals had dived almost nine per cent this afternoon after announcing it has bought into a "significant" gold asset in the Democratic Republic of Congo (DRC).
The group has acquired a 4.5 per cent stake in private company Casa Mining Limited, based in Mauritius, that holds prospective gold mining and exploration licences in the DRC.
Premier has also raised £300,000, before costs and expenses, through the issue of new ordinary shares at an issue price of 0.32p per share, which will fund the $250,000 (£205,400) investment.
Casa holds the rights to three mining licences located in the highly prospective South Kivu province in the DRC's eastern gold belt.
Read more: London-listed miners lose out as gold demand dampens
A positive scoping study of the Akyanga Deposit confirmed the potential viability of an 80,000 oz gold per year heap leach operation, with a total cash operating cost of US$628/oz based on current resources.
Casa plans to commence a 5,000 metre exploration program to validate the 3m oz potential target at Akyanga and issue a revised scoping study by the end of 2017.
Premier chief executive George Roach said:
This investment in Casa secures exposure to an exciting gold project in a very prospective region. The Akyanga deposit has a large and well defined resource base as well as the potential to be brought into production relatively quickly. The scoping study potentially demonstrates a technically viable and economically robust project.
And, the plan to commence an exploration programme to validate the 3 million ounce potential target should generate significant value for the company. I am also delighted that our lender, Darwin, has consented to this investment which we believe provides excellent value at a time when investment demand in the gold sector is picking up.
Read more: Kaz Minerals shares jump as new copper mines progress
Premier's stock was trading down 8.65 per cent at 0.365p in early afternoon trading.
[charts-share-price id="629"]
In September, the group's half-year results showed its operating loss had widened from $1.5m in the first half of 2015 to $2.8m.
Weeks earlier, it announced it had commenced drilling at its Zulu lithium project in Zimbabwe.