Here's why the Andromeda Metals (ASX:ADN) share price is jumping 13%

This ASX share is on the move…

| More on:
Two women jumping into the air.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Oversubscribed SPP

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.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Capital Raising

A man sits in a chair hunched over a laptop and covered head to toe in frozen icicles to represent Envirosuite's trading halt
Capital Raising

Up 102% in 2024, here's why this ASX All Ords stock is now frozen

Seize the day. This company is ready to cash in on its renewed image.

Read more »

A man slumps crankily over his morning coffee as it pours with rain outside.
Materials Shares

Why is this ASX 300 battery materials stock crashing 20% today?

Its shares are now down by 67% since this time last year.

Read more »

A man with a heavy facial hair growth and a comical look on his face holds his hands in a 'time out' gesture.
Energy Shares

Up 90% in a year, why is this ASX 300 uranium stock suddenly halted?

Here's why this high-flying stock is out of action today.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Mergers & Acquisitions

Why are Metcash shares tumbling today?

This wholesaler has just received a $300 million cash injection.

Read more »

A man sitting at a computer is blown away by what he's seeing on the screen, hair and tie whooshing back as he screams argh in panic.
Materials Shares

Why is the Arafura share price sinking 17% today?

It has been a tough session for this rare earths stock. But why?

Read more »

Two happy pharmacists standing together in a pharmacy.
Capital Raising

Own Sigma shares? Everything you need to know about the 'transformational' $8.8b merger with Chemist Warehouse

Here's what you need to know about this mega merger.

Read more »

Close up of a sad young woman reading about declining share price on her phone.
Energy Shares

Why is the Boss Energy share price sinking 5% today?

This uranium share is raising funds. But why?

Read more »

a man in a suit holds up a hand and a stop sign at a roadblock positioned over a bitumen road .
Capital Raising

Why are Boss Energy shares in a trading halt?

This uranium share is raising funds. But why?

Read more »