The Andromeda Metals Ltd (ASX: ADN) share price has been enjoying a stellar run over recent weeks.
Shares in the mining company have soared from 15.5 cents to 19.5 cents in the past four weeks, up 26%. By comparison, the S&P/ASX 200 Index (ASX: XJO) is up around 3% over the past month.
Let's take a look at what may be weighing on the minds of investors.
New mining lease
Andromeda is a South Australian explorer aiming to supply high-quality industrial minerals to the global market. The company's flagship project is the Great White kaolin project on the state's Eyre Peninsula.
Two significant factors weighed on the Andromeda Metals share price in the past month. The first is the pending merger with Minotaur Exploration Ltd (ASX: MEP). If approved, it would provide Andromeda with 100% ownership of the Great White kaolin project.
Andromeda is offering 1.15 new Andromeda shares for each Minotaur share. This offer opened on 8 December and will close on 31 January. Minotaur Directors unanimously recommended shareholders accept the Andromeda offer in a statement released to the market on 8 December. Shares in Andromeda increased 13% between the close on 7 December and 10 December.
The second major event to help the Andromeda share price was the South Australia Minister for Energy and Mining Dan van Holst Pellekaan granting a mining lease and two supporting licences for the Great White kaolin project. Andromeda released a statement to the market on 17 December describing this approval as a "significant positive step forward" for the project. Shares in the company soared nearly 6% between market close on 16 December and 17 December.
Commenting on this approval, managing director James Marsh said:
This really is a fantastic success for all Andromeda stakeholders and a crucial milestone in the evolution of the company. It will allow us to progress with full confidence into a very exciting 2022 and become a sustainable, world-class producer of kaolin minerals.
Once in production a whole range of new and significant halloysite-kaolin opportunities will open up for us, and I would like to thank the whole Andromeda team for their dedication and professionalism.
Andromeda share price snapshot
The Andromeda share price has fallen 34% over the past year but is up more than 5% this week.
For comparison, the S&P/ASX 200 Index (ASX: XJO) has returned nearly 11% to investors in the past year.
This ASX share commands a market capitalisation of around $484 million based on its current share price.
