Here’s why the Carpentaria (ASX:CAP) share price is sliding 9% today

The Carpentaria Resources Ltd (ASX: CAP) share price is slipping 9% today after providing an update on its joint venture sale agreement. Here’s the details.

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The Carpentaria Resources Ltd (ASX: CAP) share price has seen better days, after falling deep in negative territory today. This follows the miner’s update on the Hawsons joint venture sale agreement.

At the time of writing, Carpentaria shares are fetching for 14.5 cents, down 9.3%. During early afternoon trade, the company’s share price hit an intraday low of 13.5 cents.

What did Carpentaria announce?

It’s been a difficult day for Carpentaria shareholders as its price has plummeted after reaching a multi-year high yesterday. A likely catalyst for the fall is due to more Carpentaria shares being put on the company’s registry.

In its announcement, Carpentaria advised that the joint venture sale agreement of the Hawsons Project has been completed. The outcome was approved by shareholders at the company’s Annual General Meeting (AGM) on 2 November 2020.

Under the agreement, Carpentaria will acquire a 24.149% interest in the Hawsons Iron Project. In return, the company will issue Pure Metals 90.8 million Carpentaria shares, with 45 million shares being allotted today. The remaining 45.8 million shares are expected in the coming days.

Carpentaria noted that the consideration of shares being issued is divided into 2 single tranches for legal reasons.

In addition, Carpentaria introduced institutional investors to Pure Metals, who have committed to buy all of the 90.8 million shares. To facilitate the move, Pure Metals appointed Shaw and Partners’ Wholesale Trading team to act on their behalf.

Carpentaria executive chair, Bryan Granzie commented:

This is a monumental day for Carpentaria as we can now move forward with renewed confidence and with widespread shareholder support.

We look forward to working with our many stakeholders as we turn our attention to the next major milestone, successfully completing the bankable feasibility study. The path forward is certainly looking brighter and with the analysis previously validated by pre-eminent resource analyst Wood McKenzie we can take a huge step towards developing our world-class iron ore project and taking our highest quality products to market in the best interest of our shareholders

Carpentaria share price snapshot

Over the past year, Carpentaria shares have travelled almost at a standstill until this month, rising 245% in 30 days. The incredible feat broke the company’s multi-year share price, hitting the 18-cent mark.

Carpentaria commands a market capitalisation of roughly $55 million, with more than 380 million shares on issue.

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