The Rex Minerals Ltd (ASX: RXM) share price fell heavily today after emerging from a trading halt.
At the closing bell, the mineral exploration company’s shares were swapping hands for 30 cents, down by 16.67%.
What did Rex Minerals announce?
A catalyst for today’s fall could be concerns about an impending share dilution. According to its release, Rex Minerals has successfully raised $50 million (before costs) in a two-tranche placement.
The offer received strong support from existing institutional, sophisticated and professional investors. The company also added new institutional investors to its register.
Rex Minerals listed the issue price for 166.7 million new ordinary shares at 30 cents apiece. This reflected a 14% discount on the last closing price of 35 cents on 3 August.
The shares will be split across two separate tranches, with the first portion coming under the company’s listing rule 7.1. This allows them to issue approximately 17.8 million shares without shareholder approval.
The second portion of shares (roughly 148.8 million) will be subject to shareholder approval at a meeting in September.
All the company’s non-executive directors have participated in the placement, with those shares also conditional on shareholder approval.
The proceeds of the placement will be used to mostly fund pre-development activities at Rex Minerals’ wholly-owned Hillside copper project in South Australia. Furthermore, the company will set aside some of the money for its 100%-owned Hog Ranch gold property in Nevada, United States.
Rex Minerals managing director and CEO Richard Laufmann commented:
This is a significant milestone for the company and for the development of the Hillside copper project. A strong appetite from institutional investors reflects support for the development thematic to be a part of this nation-building project.
The funds raised place the company in a great position to begin pre-development at Hillside whilst progressing towards a Final Investment Decision for Stage 1 late next year, as well as pursuing additional value at Hog Ranch.
About the Rex Minerals share price
It’s been a wild ride for Rex Minerals shareholders, with the company’s shares accelerating by almost 80% year to date. Looking at a longer time frame, Rex Minerals shares are up around 38% since this time last year.
Based on today’s price, Rex Minerals has a market capitalisation of around $128.8 million, with approximately 422 million shares outstanding.