Why has the Nickel Mines (ASX:NIC) share price dumped 15% in a month?

Here's what's been weighing on the company's stock.

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Key points
  • It's been a big month for Nickel Mines – it has released news of deals, acquisitions, and capital raises
  • However, the market has simultaneously bid the company's share price down 15%
  • Here's a breakdown of what's been going on with Nickel Mines over the last 30 days 

The Nickel Mines Ltd (ASX: NIC) share price has been struggling lately despite releasing a barrage of seemingly good news.

Over the last 30 days, it released news of a solar deal, an acquisition, and its quarterly activities report.

Sadly, over the same period, the Nickel Mines share price has tumbled 15.09% to trade at $1.37.

For context, the S&P/ASX 200 Index (ASX: XJO) and the All Ordinaries Index (ASX: XAO) have both slipped 2% over the last month.

Let's take a look at what exactly has been dragging the nickel explorer and developer's stock lower over the last month.

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

Image source: Getty Images

Here's what's driven the Nickel Mines share price lately

It's been a busy month for Nickel Mines. And while it's been releasing numerous announcements, the market has been bidding its share price lower.

The first dip came on 19 January when the company released news of a deal that could see a 200-megawatt peak solar farm built within the Indonesia Morowali Industrial Park.

Power from the solar farm would be able to power Nickel Mine's processing activities.

Shortly after, the company released its quarterly activities report.

Over the 3 month period ended 31 December, the company's production and earnings before interest tax, depreciation, and amortisation (EBITDA) were relatively flat with the previous quarter's.

While January was tough on Nickel Mines' stock, February brought plenty more drama.

The Nickel Mines share price was put in the freezer on 9 February. It was thawed after the company released news of a US$225 capital raise.

As part of the raise, shares in the company were offered for $1.37 apiece in two placements – each worth $148 million – and an ongoing share purchase plan – worth $18 million.

The funds raised will go towards the acquisition of a 30% stake in the Oracle Nickel Project.

The company announced today that it has paid US$53 million for an initial 10% stake. The other 20% is expected to be acquired by June.

Eventually, it hopes to hold a 70% interest in the project for a total cost of US$525 million.

Nickel Mines said the acquisition "represents [its] next wave of growth" and "provides a clearly defined growth path to the company becoming a top-10 global nickel producer".

Unfortunately, despite all its seemingly positive news, the company's stock has only spent 8 trading days in the last month in the green.

Though, the Nickel Mines share price is still 4.5% higher than it was this time last year.

Motley Fool contributor Brooke Cooper 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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