The Caravel Minerals Ltd (ASX: CVV) share price is in reverse following the company's announcement of a share placement.
During early-afternoon trade, the base metals provider's shares are going for 29 cents a pop, down 3.3%.
Details of the share placement
Investors are dropping Caravel shares on news of the company's latest capital raising.
According to its release, Caravel advised it has received firm commitments to raise $7.5 million through a share placement. The offer was presented to institutional and professional investors at an issue price of 27 cents per share. This equates to close to 27.8 million new ordinary shares being added to the company's registry.
Caravel highlighted that a large institutional investor put forward its intent to subscribe for $7 million in the placement.
However, for the capital raising to go ahead, shareholders will need to approve the company's placement at the shareholder meeting. It is expected this will be held in mid-June. Should everything go according to plan, Caravel will issue the new shares, ranking them equally with the existing shares outstanding.
Proceeds of the placement will be allocated towards a number of objectives, including:
- Additional infill and extensional drilling on the Caravel Copper Project
- Potential acquisition of land over the Bindi Deposit and Caravel Copper Project
- General working capital.
Caravel noted that it remains fully-funded to complete its Pre-Feasibility studies as well as advance some key initiatives. This includes land acquisition that will reduce the risk of the copper project and hasten development decisions.
The monies received from the placement will provide detailed drilling at Bindi East after discovering new potential mineral resources. The main criteria of the programme will be to define higher-grade areas that can be brought into the early-mining planning schedule.
Caravel share price review
Caravel shares have been a standout over the past 12 months, accelerating over 1,200%. This means if you picked up $1,000 worth of shares this time last year, it'd be worth north of $12,000.
Based on the Caravel share price at the time of writing, the company has a market capitalisation of roughly $100 million, with 347.6 million shares on issue.
