The Latrobe Magnesium Limited (ASX: LMG) share price hit its highest point in 21 years today after the company came out of a trading halt.
The magnesium producer informed the market this morning that it has completed an oversubscribed placement.
In early afternoon trade, Latrobe Magnesium shares are swapping hands at 15 cents, up 15.4%.
At one point, the share price reached 18 cents, up 38.5%, before treading lower likely due to profit-taking. This is its highest price since 2000.
Latrobe Magnesium completes placement
Investors are excited about how the company is tracking and are buying up Latrobe Magnesium shares in the process.
According to its latest release, Latrobe Magnesium raised $11.5 million (before costs) through the placement.
The offer was significantly oversubscribed with support from professional, sophisticated and overseas institutional investors.
Latrobe Magnesium will issue roughly 115 million shares at 10 cents apiece. This represents a 30% discount to the last closing price of 13 cents on 9 November.
In addition, investors will acquire 28.75 million attaching options exercisable at 4 cents within the next 2 years.
Latrobe Magnesium will use the funds to fast-track the construction of the initial 1,000 tonne per annum magnesium plant in Latrobe Valley. The project's capital cost estimate has been reduced to $39 million, down from $45 million.
So far, $2.5 million has been spent on the initial phase, with the remaining costs about $36.5 million.
Latrobe Magnesium will draw upon $3.6 million in existing cash, $10.8 million from the net proceeds of the placement, $4 million from a Victorian Government grant, and $20 million via debt facilities.
Latrobe will allocate a $1.9 million surplus for working capital purposes and further optimisation test work.
Construction of the plant is scheduled to commence in January 2022.
About the Latrobe Magnesium share price
Over the past 12 months, the Latrobe Magnesium share price has accelerated by more than 600%, with year-to-date gains of 540%.
Based on today's price, Latrobe Magnesium presides a market capitalisation of $211.66 million. It has approximately 1.43 billion shares outstanding.
