The Australian Strategic Materials (Hldngs) Ltd (ASX: ASM) share price will be one to watch when it resumes trading. The company requested to be placed in a trading halt in anticipation of a capital raising announcement.
The ASM share price closed at $4.99 yesterday. This was down 3.48% from the previous days close. In comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) closed yesterday down 0.06%.
Currently, we do not know yet how much capital ASM will raise, or for what purpose it will be used. However, we can get insight by looking at their business movements over the recent past.
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Company background
ASM is involved in producing and mining rare earth elements (REE). REEs include cerium, neodymium, europium, yttrium, and promethium among others. Its main site is located near Dubbo, New South Wales.
According to Geoscience Australia, REEs are used in a variety of everyday technology. These include magnets and super magnets, motors, metal alloys, electronic equipment, batteries, catalytic converters, petroleum refining, medical imaging, and more.
Just over the last couple of months, ASM made 4 price-sensitive announcements to the ASX. However, each has had mixed results on the ASM share price.
The first saw titanium powder produced by the company approved for 3D printing. The second announcement confirmed certain ASM alloys were suitable for producing permanent magnets. The third declared a scoping study supported a $45 million plant build in Korea. Meanwhile, the fourth announced a deal between ASM and a Korean province about the said plant.
The plant will be located 115km south of Seoul. It will produce neodymium-iron-boron powder and titanium powder. The government will provide grants and tax breaks to ASM as part of the deal.
Share price snapshot
Since listing on 30 July 2020, the ASM share price has increased by a whopping 256.43%. It is, however, down 27.05% than its record high of $6.84.
The company was listed on the All Ordinaries Index just in the last couple of weeks.
At its current valuation, ASM has a market capitalisation of $600.6 million.
