The IGO Limited (ASX: IGO) share price has blasted up 18% early today as the miner returns to trade for the first time since Monday. The IGO share price is trading higher at $6.01 at the time of writing.
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Why is the IGO share price rocketing up?
Shares in the Aussie company have been in a halt this week after unveiling a US$1.4 billion (A$1.9 billion) acquisition. IGO will acquire a 49% stake in Tianqi Lithium Energy Australia Pty Ltd from China-listed Tianqi Lithium Corporation.
IGO's venture into lithium meant the company needed to raise some significant funds from shareholders. IGO announced a $766 million capital raise comprising an institutional entitlement offer and an institutional share placement.
IGO today announced the placement raised approximately A$446 million, while the entitlement offer raised $261 million. The offer price represented a 9.7% discount to IGO's 7 December 2020 closing price of $5.095 per share.
The diversified mining and exploration company's shares are set to return to trade after what has been a busy period. The IGO share price has slumped 17.3% lower in 2020 having started the year at $6.17 per share.
All eyes will be on the Aussie mining group's shares after the bold strategic move announced earlier in the week.
What's the deal with IGO's acquisitions?
The $1.9 billion price tag will net IGO a 24.99% indirect interest in the Greenbushes Lithium Mining and Processing Operation (Greenbushes) and a 49% indirect interest in the Kwinana Lithium Hydroxide Plant (Kwinana).
This represents a bold push into the potentially lucrative lithium market with IGO tilting towards the sector for future growth.
The IGO share price has climbed 121.5% in the last 5 years with a current market capitalisation of $3.01 billion. Prior to the open, the mining group's shares were yielding 2.16% p.a. with a 19.5 price to earnings (P/E) ratio.
Foolish takeaway
The IGO share price will be one to watch upon its return to trading today, particularly the case given a recent price target upgrade from leading broker, Jarden.
There are a number of other S&P/ASX 200 Index (ASX: XJO) shares on the move in early trade including CSL Limited (ASX: CSL) after the company scrapped further trials of a potential COVID-19 vaccine candidate this morning.
