The Andromeda Metals Ltd (ASX: ADN) share price is flying today on the back of the second component of its capital raise.
During afternoon trade, the mineral exploration company’s shares are up 12.9% to an intraday high of 17.5 cents.
Investors are driving up the Andromeda Metals share price following the company’s strongly supported Share Purchase Plan (SPP).
According to its release, Andromeda has successfully completed its SPP, raising $15 million. The offer received almost 1,600 applications from existing shareholders, who applied for more than $26.2 million under the SPP.
The retail component will see 100 million new shares created at a price of 15 cents each. This follows the recently completed $30 million placement.
Most of the $45 million raised will go towards the development of the company’s Great White Kaolin Project. It will be used for pre-construction activities and long lead items such as plant equipment purchases.
Furthermore, the funds will be also be allocated to ongoing research and development, exploration programs and working capital requirements.
The SPP shares are expected to be issued today, and be available for trading from tomorrow.
Andromeda managing director James Marsh commented:
With the combined funds received from the Placement and SPP, the company now has the financial capacity to meet its share of final feasibility study costs and commitment to early lead time items under the joint venture with Minotaur and allow construction and mining to commence at the project in 2022 once a final decision to proceed is made by the joint venture partners.
Andromeda Metals share price snapshot
Investors would have mixed feelings depending on when Andromeda shares were picked up. Year-to-date, the company’s share price is down 36%. However over the past 12 months, its shares are up 250%.
Based on today’s prices, Andromeda has a market capitalisation of roughly $401 million, with approximately 2.3 billion shares on issue.