UPDATE 2-Aricom raises $554 mln in share placement

(Adds result of placing, CEO quote, closing share price)

MOSCOW/LONDON, May 10 (Reuters) - Russia-focused miner Aricom Plc TIO.L raised around $554 million by placing new shares and said it wanted to move to a full listing on the London Stock Exchange this year.

Aricom, currently listed on London’s Alternative Investment Market, said in a statement on Thursday that a total of 133 million units -- comprising 399 million new shares and 133 million warrants -- had been successfully placed at 210 pence per unit.

Earlier the company had said it hoped to raise around $500 million via a placing of 351 million new shares and 117 million warrants, each allowing the holder to buy one new share, but had had an option to increase the size of the placing.

“We are delighted with the market’s positive response to our fund raising,” Chief Executive Jay Hambro said in a statement.

Hambro earlier told Reuters the proceeds would be used to start construction next year at two mining projects in Russia’s far east -- K&S and Garinskoye -- that will supply iron ore across the border to China.

“With the funds in the bank, we can begin to make serious commitments to both contractors and equipment suppliers,” he said.

Aricom’s AIM-listed shares closed down 11.8 percent at 69 pence.

Joint bookrunners JP Morgan Cazenove and Canaccord Adams took up the option to increase the size of the placing to a maximum 399 million shares and 133 million warrants.

Hambro said a listing on the London Stock Exchange’s main board by the end of 2007 would give the company access to a wider range of investors.

“This year we’re moving from being a developer to a producer. There are many attractions to upgrading to the main board, and we consider this to be a suitable time to do so.”

Aricom plans to start its Kuranakh iron ore and titanium project in the Amur region by the end of this year. The company said last week it had raised $65 million in capital from financial institutions to fund development of Kuranakh.

The separate Garinskoye project, also in Amur, will require $1.28 billion in capital expenditure to reach full capacity. The K&S -- or Kimkan & Sutara -- project in the adjacent Jewish Autonomous Region will require about $800 million, Aricom said.