The Silver Mines Limited (ASX: SVL) share price is sinking today following an announcement that the miner has successfully completed a capital raise.
During mid-afternoon trade, shares in the silver-focused mineral exploration company are down 3.64% to 26 cents.
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Successful capital raise
The Silver Mines share price hasn't fared well today, despite the company updating investors about its latest placement.
According to its release, Silver Mines has successfully completed a capital raise of $30 million. Offered to institutional, professional and sophisticated investors, the company revealed that demand exceeded the funds needed to accelerate its growth strategy.
The placement was executed at an issue price of 22 cents per share, reflecting a 13.6% discount on the five-day volume-weighted average price. As a result, Silver Mines will place an extra 136,363,637 fully-paid ordinary shares to its registry.
The funds received from the capital raise will be primarily used towards progress the company's flagship Bowdens Silver Project. This includes pre-development expenses as well as funding exploration activities over the next 12 months. In addition, corporate and general working capital will also be financed.
Settlement of the placement is expected to occur this Friday 19 February. Quotation of the placement will follow through on Monday 22 February.
Quick take on Silver Mines
Silver Mines is Australia's largest pure play silver company with expertise in exploration and development of quality silver projects. Its portfolio consists of the Conrad and Webbs projects, the Tuena Project and its recently acquired Bowdens Silver Project. The company's Bowdens project is said to be one of the world's largest undeveloped silver sites – a mineral resource of 275 million ounces of silver equivalent.
Silver Mines share price review
In the last 12 months, the Silver Mines share price has been trending upwards, gaining more than 160% on this time last year. The company's shares hit a 52-week low of 5.2 cents in March 2020 before recovering.
On current prices, Silver Mines has a market capitalisation of around $276 million.
