LONDON (ShareCast) - The share price of Red Emperor Resources, which has doubled in the last month, got another shot in the arm as the company revealed it finished 2011 sitting on a pot of cash.
Cash and cash equivalents in the second half of 2011 rose from from $0.22m to $4.68m, reflecting successful fund raising operations, though the cash pile was down from $7.94m at the end of 2010. The company raised $6.32m in December through a placing of shares at 11p each to "sophisticated investors".
As well as being sophisticated, those investors are likely to be feeling pretty smug, as the share price heads north of 40p.
Also sitting pretty are those who bought shares at 18p a throw back in February when the company sold the first tranche of a two-tranche issues of 45.5m shares to raise £6.92m.
The stash of readies from the share placings will be needed as the company is still in the cash burn phase of its existence, as it gets to work exploring its licence areas in Puntland and Georgia.
The miner saw loss before tax rise to $2.9m in the six months to the end of December from a loss of $0.89m in the corresponding period of 2010.
Share based payment expenses ($1.04m), as well as regulatory and administration expenses ($0.56m) relating to the company's flotation in June 2011, burned through some of the cash, while the company took an impairment charge of $0.77m relating to exploration expenditure.
There has been much speculation on Internet message boards about the fruits of that exploration, particularly relating to the Puntland asset.
The Puntland project has completed all of the sourcing of drilling related materials, and the well is being readied for the first exploration well, Shabeel-1, on the Dharoor block. Red Emperor intends to drill two wells in Puntland.
Meanwhile, at the Georgian project, the first exploration well was successfully drilled.
The share price rose 9.84% to 43.25p.
NR/jh