The White Rock Minerals (ASX:WRM) share price plunged 23% today

Why did shares in this explorer fall to a yearly low today?

| More on:
A sad Rio Tinto miner holds his head in his hands

Image source: Getty Images

The White Rock Minerals Ltd (ASX: WRM) share price was drowning in a sea of red today, reaching a 52-week low after the company announced an $11 million capital raise.

At market close, the White Rock Minerals share price was down 22.58%, trading at 24 cents.

White Rock Minerals is a mineral explorer going for gold at the Woods Point Gold Project in Victoria.

What is White Rock Minerals up to?

In its release today, the company advised it planned to raise $11.3 million before costs via a $2.25 million share placement and $9.1 million entitlement offer.

Capital raises can be a catalyst for a share price plunge (akin to today’s performance) due to share dilution. Indeed, the company said in its release the share offer represented a 23% discount on the trading price before the capital raise of 31 cents.

White Rock said eligible shareholders would also be offered a 1 for 4 pro-rata non-renounceable entitlement offer.

The money will be used for gold exploration at the Woods Point Gold Project. The company acquired this project via a merger with AuStar Gold in August 2021.

The exploration area of 660km is located in one of Victoria’s largest historic goldfields, 120km east of Melbourne.

Management commentary

White Rock managing director and CEO Matt Gill said:

This capital raise will see White Rock continue this aggressive exploration focus on the significant in-mine and regional exploration potential of the project.

The board is very appreciative of the support shown from current shareholders and the interest and support being shown from the new investors now joining the White Rock journey through this equity raising.

White Rock Minerals share price snapshot

White Rock Minerals share price has fallen 56.36% over the past 12 months and 59% in the year to date. The share price is currently trading at a 52-week low of 24 cents.

The company has a market capitalisation of about $34 million.

Should you invest $1,000 in White Rock Minerals right now?

Before you consider White Rock Minerals, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and White Rock Minerals wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

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 Resources Shares

a woman wearing a gold top and carrying a gold bar gives the thumbs down signal as she leans against a wall with a sombre look on her face.
Gold

Here’s why the Ramelius (ASX:RMS) share price tumbled 8% to 4-month lows today

Key points The Ramelius share price sank 8% today Investors did not warm to the company’s quarterly results Gold production …

Read more »

A graphic image of three upward pointing arrows with smoke coming from their bottoms, indicating the arrows are taking off just like the Althea share price today
Resources Shares

Did this just cause the American Rare Earths (ASX:ARR) share price to surge 30% higher?

Key points American Rare Earths’ shares are rocketing higher today A letter to shareholders may have given its shares a …

Read more »

ASX miners crash opportunity broker buy asx shares represented by investor throwing hands up towards icons of buy and sell broker upgrade buy
Broker Notes

Time to sell? Macquarie just downgraded these 3 ASX shares from buys

Key points Macquarie comes out with a list of downgrades today The 3 ASX shares are all concentrated in resources …

Read more »

mining worker making excited fists and looking excited
Resources Shares

Is the BHP (ASX:BHP) share price a buy in all of this volatility?

Key points The BHP share price has been outperforming the ASX 200 in 2022 Iron ore continues to rally higher, …

Read more »

A man in a blue collared shirt sits at his desk doing a single fist pump as he watches his Neometals shares rising on his laptop
Resources Shares

Why is the BHP (ASX:BHP) share price leaping ahead today?

The S&P/ASX 200 Index (ASX: XJO) has unfortunately slipped into negative territory so far this Thursday, after an initially strong market …

Read more »

Man open mouthed looking shocked while holding betting slip
Broker Notes

Broker tips Fortescue (ASX:FMG) share price to sink 30% and warns of dividend cuts

The Fortescue Metals Group Limited (ASX: FMG) share price is pushing higher today after a rise in the iron ore …

Read more »

Business man marking Sell on board and underlining it
Broker Notes

Mineral Resources (ASX:MIN) share price falls 5% following brokerage downgrade

Key points The Mineral Resources share price is coming under more pressure after JPMorgan downgraded it to underweight or sell …

Read more »

Female worker sitting desk with head in hand and looking fed up
Resources Shares

Own Rio Tinto (ASX:RIO) shares? What options does the company have in response to the Serbian government’s decision

Key Points Rio Tinto shares withstand market pressure Management looking at legal options to overturn the Serbian Government’s decision Rio …

Read more »