Vital Metals Limited (ASX: VML) shares have been placed in a trading halt on Thursday, pending an announcement of a capital raise. According to its website, the company is on the verge of transitioning from a rare earths explorer to a producer.
The Vital Metals share price has soared from the 1 cent range twelve months ago to a close of 8 cents on Wednesday.
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Transformational year for Vital Metals
Vital Metals has achieved a number of significant milestones during its journey from explorer to producer.
On 22 September 2020, the company signed a binding term sheet to negotiate definitive agreements for the construction and operation of a rare earth extraction plant to produce a mixed rare earth carbonate.
By 22 December 2020, Vital Metals had entered into a binding term sheet with REEtec for an annual volume of 1,000 tonnes of rare earth oxide over five years. Both parties have an option to increase this offtake volume up to 5,000 tonnes over ten years.
Vital's strategy is to develop its flagship Nechalacho project in two stages. Stage one of the operations focuses on the current development and construction of the site to begin producing rare earth oxide, while stage two aims to expand its current resource and project size. The company announced that drilling for stage two had commenced on 16 February 2021.
By 26 February, Vital announced it was on track to commence rare earth production at its Nechalacho project by Q2 CY21. This would make Vital the first rare earths producer in Canada and only the second producer in North America.
Trading halt for capital raise
Vital Metals shares have entered a trading halt on Thursday regarding a capital raise. The company anticipates that it will resume trading by Friday 19 March.
In the company's half-year accounts for 31 December 2020, it had $6 million in cash and cash equivalents and delivered a net loss of $4 million.
