The King Island Scheelite Limited (ASX: KIS) share price is rocketing in mid-afternoon trade following a completed capital raise.
At the time of writing, the mining company's shares are swapping hands for 26.5 cents, up 17.78%.
What's driving the King Island Scheelite share price higher?
The King Island Scheelite share price pushes higher as investors appear to welcome the company's efforts to become debt-free.
In today's release, King Island Scheelite advised that it has completed a placement to raise $5.6 million. This will see 28 million new ordinary shares issued, which the company offered at 20 cents apiece.
The company said the placement falls under listing rule 7.1, which allows a further 15% of its shares to be issued without shareholder approval.
Swiss investment company DACHS Capital AG took up the bulk of the offer, with 20 million shares subscribed. The remaining balance of 8 million shares was allocated to Australian professional investors through MAC Equity Partners – the lead manager.
King Island Scheelite said that it would use the funds to repay its entire debt of $4.7 million, including any interest accrued. Previously the company had racked up an interest bill when acquiring some fixed property next to the Dolphin mine site.
The left-over monies from the placement will be put towards working capital to progress operations at the Dolphin mine.
Words from management
King Island Scheelite executive chair Johann Jacobs commented:
DACHS Capital AG became a shareholder in the company in early January 2021 and we are extremely pleased that they have shown the confidence in KIS to increase their investment and become a substantial shareholder.
We look forward to a strong long-term association with our new shareholders as we develop the Dolphin project and resume tungsten mining operations in Tasmania.
The King Island Scheelite share price has gained more than 500% over the past 12 months and 150% year-to-date.
