The Ardea Resources Ltd (ASX: ARL) share price is racing higher during late afternoon trade. This comes after the minerals mining company provided an update on its recent capital raise.
At the time of writing, Ardea shares are up 6.54% to 57 cents – slightly below its 52-week high of 63 cents.
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What's driving the Ardea share price higher?
Ardea shares are roaring higher following a successful capital raise to accelerate the Kalgoorlie Nickel Project (KNP) feasibility work.
According to its release, the company announced it has received $5.7 million in binding commitments by a way of placement. The offer saw sophisticated investor and professional clients apply for the shares, showing strong support.
Around 10.3 million new ordinary shares will be added to its registry at a price of 55 cents a pop. This represents a premium of 2.8% to the last closing price of 53.5 cents on 25 June 2021.
Ardea will use its existing placement capacity to create the new shares. Under listing rule 7.1A, this allows up to 15% of its total shares to be issued without shareholder approval.
The proceeds of the placement will see Ardea fund hydrology and metallurgical drilling programs, metallurgical test work, and pit optimisation studies. In addition, an independent engineering group has been approached to complete a gap analysis of previous KNP feasibility studies. This is expected to be finalised before Ardea begins metallurgical programs at the site.
It's expected the placement's new shares will be settled on or around 5 July 2021.
Management commentary
Ardea managing director, Andrew Penkethman touched on the company's progress, saying:
We have drill rigs contracted for the KNP Goongarrie Hub to commence drilling water production bores and metallurgical core holes during the September 2021 Quarter.
Borefield exploration drilling has recently been completed and defined production bore targets are ready for drilling. This hydrology drilling will lock in secure process water supplies for the development of our nickel and critical mineral resources at the Goongarrie production hub.
…We will also be assessing options to recover additional critical minerals, in addition to the planned nickel-cobalt and scandium production. All of these work streams will further enhance the Kalgoorlie Nickel Project and build upon the prefeasibility and expansion studies completed by Ardea in 2018.
The Ardea share price has gained 110% in the last 12 months, and is up over 40% in 2021.
