GreenX Metals Ltd on Thursday said it raised A$4.2 million, or £2.1 million, via a placing of new shares to fund exploration activities at its projects in Greenland.

Shares in GreenX Metals dropped 7.7% to 47.10 pence each in London on Thursday late morning.

The Greenland-focused mineral exploration and development company said it placed 5.2 million new shares at a price of A$0.80 each, or 41p, which it said, together with existing cash resources of around A$8.7 million at June 30, would help ensure that GreenX Metals retains a strong balance sheet position.

Specifically, GreenX Metals said net proceeds from the placing will be used for exploration activities at the company’s projects in Greenland: the Eleonore North gold project, which it recently acquired from Greenfields Exploration Ltd; and the Arctic Rift copper project, which is a joint venture with Greenfields.

On Wednesday, GreenX Metals requested an immediate voluntary trading halt in its shares on the Australian Securities Exchange, pending an announcement regarding a capital raise. This came a day later, as outlined above.

It requested the trading halt remain under the earlier of the planned announcement or the opening of trade in Sydney on Friday, while noting trading of its shares in London and Warsaw would continue as normal.

On Monday, GreenX Metals said entered into an option agreement to buy up to 100% of a potentially large-scale gold project in eastern Greenland.

GreenX Metals took out the option over the Eleonore North gold project from Greenfields. The option vests once GreenX Metals has spent A$600,000, about £311,476, on exploration at the project within 12 months.

It can be exercised for A$250,000 in cash, A$250,000 in cash or GreenX Metals shares, and a 1.5% net smelter royalty.

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