The Metalstech Ltd (ASX: MTC) share price is surging today following news of a $2 million strategic investment.
The company has signed a strategic investment agreement with Chifeng Jilong Gold Mining that will see Chifeng subscribing to buy more than 5.8 million Metalstech shares for 34 cents apiece.
At the time of writing, the Metalstech share price has boomed to 42.5 cents, 19.72% higher than its previous close. Additionally, the Metalstech share price hit a new all-time high of 44.5 cents earlier today.
Let’s take a closer look at today’s news from the lithium and gold exploration company.
Metalstech’s new investor
The Metalstech share price is soaring this morning following its announcement of a significant strategic investment.
China’s Chifeng will be investing in Metalstech via its subsidiary Chijin International.
Metalstech will issue approximately 5.8 million shares to Chifeng before its planned spinout of Winsome Resources.
Winsome is to take over Metalstech’s lithium resources. The split will allow Metalstech to focus on its gold assets.
Metalstech shareholders will receive $9 million worth of Winsome shares – valued at 20 cents apiece – as part of the demerger.
After Chifeng receives its allocated new shares, Metalstech shareholders will get 1 Winsome share for (approximately) every 3.66 Metalstech shares they already hold.
That would see Chifeng with around 1.6 million shares in Winsome after the spinout. It is scheduled for 7 October and is subject to shareholder approval.
Additionally, Metalstech plans for Winsome Resources to float on the ASX after the spinout. Details of Winsome’s potential initial public offering (IPO) are yet to be announced.
Commentary from management
Metalstech chair Russell Moran commented on the news driving the company’s share price higher today:
Chifeng is widely considered to be one of the most succesful precious metals investors in China… We hope that this recent interest from Chifeng is a sign of growing interest in out broader development plans for [the Sturec Gold Mine].
Metalstech share price snapshot
Today’s gains have seen the Metalstech share price well and truly in the green.
It is currently 107% higher than it was at the start of 2021. And it has gained 97% since this time last year.