The Coda Minerals Ltd (ASX: COD) share price is firmly in negative territory today. This comes after the mineral explorer provided an update on its recent equity raise.
During mid-morning trade, Coda Minerals shares are swapping hands for $1.26, down 9.03%
Placement update
Investors are scrambling to sell Coda Minerals shares as the company prepares to dilute existing shareholder value.
According to its release, the mining outfit announced it has received $14.4 million in firm commitments by a way of placement. The offer saw significant oversubscription from both institutional and sophisticated investors.
In total, 12 million new ordinary shares will be added to its registry at a price of $1.20 a pop. This represents a discount of around 4.1% to the 5-day volume weighted average price (VWAP) until 16 June 2021. However, the 12 million shares will join the 69.7 million already on its registry.
Coda Minerals will use its existing placement capacity to create the new shares. Under listing rule 7.1, this allows up to 15% of its total shares to be issued without shareholder approval.
The proceeds of the placement will see Coda Minerals fund an exploration programme at the 70%-owned Elizabeth Creek Copper Project in South Australia. The company will also tap into its existing cash reserves to accelerate resource drilling activities.
Coda Minerals will have approximately $21.5 million in the bank after costs of the placement.
It's expected the placement's new shares will be settled on 25 June 2021, with allotment following thereafter on 28 June.
Coda Minerals chair, Keith Jones commented, "We are absolutely delighted with the strong support received from the market."
"The next six months promises to be a transformational period for Coda shareholders."
The Company remains on track to deliver its Mineral Resource Estimate at the Emmie Bluff Copper-Cobalt Deposit in the second-half of 2021.
Coda Minerals share price summary
It's been an exciting month for Coda Minerals shares, having accelerated to astronomical highs. The company's share price hit an all-time high of $1.75 on 16 June, before plummeting today.
On valuation grounds, Coda Minerals commands a market capitalisation of around $87 million.
