The European Lithium Ltd (ASX: EUR) share price is rocketing higher today. This comes after the company announced it has received commitments to fund its lithium exploration activities.
At the time of writing, the lithium miner's shares are up an astonishing 50% to 10 cents. It's worth noting that during midday trade, the European Lithium share price reached an intraday high of 13 cents.
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What's shooting the European Lithium share price?
According to its release, European Lithium has welcomed the positive placement to raise $7 million through sophisticated investors. The offer price of 5 cents per share represents a steep discount on the current European Lithium share price. In addition to the take up offer, investors will also be issued one option for every 2 shares received. The exercise price for this option is 7.5 cents and will expire 3 years from the date of issue.
The company stated that the monies raised from the institutional placement will complement its proposed share purchase plan. The latter which is due to close this Friday, 22 January.
The funds will be allocated towards its exploration and development on its Wolfsberg Lithium Project in Austria. In addition, the company will seek to search for gold through its West Australian strategic tenement. Recent gold discoveries have been made by a number of companies within the North West Western Australian region.
European Lithium advised that the issuance of shares from the placement will be done without shareholder approval.
Words from the chair
European Lithium chair, Mr Tony Sage, touched on the company's prospects, saying:
We are excited by the huge support in the Placement shown by institutional and high net worth investors in Australia, Asia and Europe. We believe this reflects the positive market sentiment for battery metals. After a very challenging year we now see demand for lithium chemicals to support a very strong EV market which led to the recent lithium price rally.
The funds will also be used to explore our recently acquired gold project in the hottest region in Australia with De Gray, Azure, Artemis and Novo all finding success.
