The Syrah Resources Ltd (ASX: SYR) share price slumped 6.9% lower on Monday as the Aussie graphite miner closed its share purchase plan (SPP) at a steep discount.
In early trading today, Syrah shares have gained slightly, up 0.57% at $1.22 at the time of writing.
Why did the Syrah share price fall 7%?
Syrah announced the results of its SPP, which closed on Wednesday 20 January. Syrah’s SPP targeted raising $12 million in new equity at a price of $0.90 per share.
The SPP was “heavily oversubscribed” with the Aussie miner receiving $63.7 million of valid applications. Applications for the SPP came at the same price as the recently completed $56 million share placement.
As a result of the oversubscription, Syrah’s board of directors decided to accept a total of $18 million from the SPP. The new shares are set to be issued on Thursday with scale back on a pro-rata basis.
Syrah managing director Shaun Verner welcomed the shareholder support. The funds will be used to progress Syrah’s natural graphite active anode material (AAM) facility in Louisiana, USA. The company is working towards a final investment decision in the second half of 2020 for the construction of a 10 kilotonnes per annum facility.
The Syrah share price slumped lower on Monday following the update on the SPP. It’s worth noting the $0.90 offer price is a steep discount to the closing Syrah share price on January 20.
Shares in the Aussie graphite miner closed at $1.19 per share last Wednesday before climbing to a new 52-week high of $1.34 per share on Thursday.
How did the graphite miner’s shares perform in 2020?
The Syrah share price rebounded strongly in 2020 after years of lacklustre performance. From late January 2016 to January 2020, shares in the Aussie graphite miner fell 86.1% lower.
2020 represented a turning point of sorts with the Syrah share price climbing 134.6% higher in the last 12 months.
The Aussie graphite miner boasts a market capitalisation of $582.1 million as at Monday’s close of trade.