Here’s why the Global Lithium (ASX:GL1) share price rocketed 15% before a trading halt

It has been an interesting day for the resources company.

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A drawing of a white rocket streaking up, indicating a surging share pirce movement

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The Global Lithium Resources Ltd (ASX: GL1) share price requested a trading halt within the first hour of trade on Thursday.

The trading halt put an end to what was a record day for Global Lithium, surging 15.48% to all-time highs of 48.5 cents.

What’s the trading halt for?

Global Lithium requested the trading halt, pending an announcement regarding a proposed capital raising.

The company said that it anticipates the trading halt to remain in place until Monday, 1 November or when the announcement is released.

Interestingly, Global Lithium is a relatively new addition to the ASX, having successfully completed a $10 million initial public offering back in May.

More recently, the company’s September quarter results highlighted a cash balance of $7.3 million with no debt.

Global Lithium incurred $882,000 in exploration and evaluation expenditure during the quarter.

About Global Lithium

Global Lithium is currently focused on growing its Marble Bar Lithium Project (MBLP).

The company believes it has a “similar geological setting” as nearby Pilgangoora which is owned by Pilbara Minerals Ltd (ASX: PLS) and Wodgina which is owned by Mineral Resources Ltd (ASX: MIN).

An exploration program is underway at MBLP including 10,000 metres of Reverse Circulation (RC) drilling as well as soil survey and reconnaissance mapping on southern tenements.

Global Lithium has also identified potential gold targets to the north of MBLP, with its fourth quarter exploration program including RC drilling to follow up on the potential discovery.

The Global Lithium share price can expect a number of catalysts in the near term as exploration results are released in the coming months.

Global Lithium share price snapshot

The Global Lithium share price closed at 28 cents on its first day of listing, an impressive 40% return for those that managed to participate in the 20 cent IPO.

It is now up 73% year-to-date at an all-time high of 48.5 cents. However, investors should be wary about the size and discount of the proposed capital raising.

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Motley Fool contributor Kerry Sun 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.

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