The Greenland Minerals Ltd (ASX: GGG) share price finished the day up 3.9% today.
Although November hasn't been kind to shareholders, with shares down 3.6% so far this month, the company has performed strongly this year.
Shaking off a 46% share price plummet during the wider COVID-market panic in February and March, shares are currently up 108% year-to-date.
By comparison the All Ordinaries Index (ASX: XAO) is up less than 1%.
What does Greenland Minerals do?
Although Australian based, Greenland Minerals' main project is the development of the Kvanefjeld rare earth project in Greenland. The company has been operating in Greenland since 2007.
Once developed, the company forecasts that Kvanefjeld will be a large-scale and low-cost source of rare earth minerals to support the burgeoning clean energy revolution.
Why did Greenland Mineral's share price gain 4% today?
Greenland Minerals emerged from a trading halt yesterday after announcing it had received firm commitment for a $30 million capital raising via a share placement to institutional, sophisticated and professional investors. The placement was priced at 24 cents per share.
Yesterday, the company's first day of trading since Friday, this announcement saw shares sell off from Friday's 30-cent closing price, losing 10%.
Today's gains likely came as investors sensed value.
Although capital raisings can be dilutive (this one will see 125 million new shares issued), they can also add value if the company puts the new capital to good use.
Greenland Minerals reported it will use the new capital to finalise licencing and permitting; to convert its optimised feasibility study to a definitive feasibility study; to advance offtake and project funding discussions; and to accelerate pre-development work.
Commenting on the capital raising, Greenland Minerals' managing director John Mair said:
The Kvanefjeld rare earth project is globally unique in terms of scale and favourable metallurgy, combined with large, low-cost output of all critical magnet rare earths, and has Greenland well-positioned to be a cornerstone to future international rare earth supply.
A strong level of international investor support in the capital raising is testament to the growing profile of Kvanefjeld… The capital raising comes on the back of important permitting milestones, and will allow us to accelerate all pre-development work program at a pivotal time with the demand for rare earths set to surge substantially through the coming years…
