The John Teeling-chaired Botswana Diamonds is raising £458,655 sterling (€630,000) through the placing of 53.9 million news shares at a price of 0.85 pence each.

Botswana Diamonds also said on Friday that it settled £86,661 in unpaid directors’ fees through the conditional issue of 10.2million of the shares to be placed.

Shareholders must pass a resolution at the company’s annual general meeting to allow those shares to be issued.

Mr Teeling is subscribing for 3.53 million shares in lieu of pay, bringing his stake in the enlarged company to 14.5 per cent.

After consulting advisers, Northland Capital Partners, independent director, Robert Bouquet, considers that the terms of the fundraising are fair and reasonable.

The company said that the funds raised will be used to pay for ongoing exploration in Botswana and to provide additional working capital.