Why is the Sayona Mining share price in a trading halt?

Sayona Mining shares are in a trading halt. Here’s why…

| More on:
A person holds a stop sign in front of their head

Images source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Sayona Mining shares have been placed in a trading halt
  • The lithium share has requested a halt so it can launch a capital raising
  • This appears to be poorly timed with its shares down 28% this week

The Sayona Mining Ltd (ASX: SYA) share price has been having a tough time this week.

Since the end of last week, the lithium share has lost 28% of its value.

This follows the release of a disappointing pre‐feasibility study (PFS) for the 75% owned North American Lithium (NAL) operation in Québec, Canada.

That study revealed a net present value of the project that was well short of the market’s expectations.

Sayona Mining share price halted

The Sayona Mining share price won’t be continuing its slide on Wednesday after the company requested a trading halt.

According to the request, Sayona Mining has requested the immediate halt pending the release of an announcement regarding a capital raising.

It has requested the trading halt remain in place until the earlier of the release of the announcement or the commencement of normal trading on Friday 27 May.

Capital raising

With the Sayona Mining share price down 28% this week, the timing of this capital raising is particularly disappointing for shareholders and is likely to be highly dilutive.

According to the AFR, the company is seeking to raise $190 million from investors at a price of 18 cents per new share. This represents a 12.2% discount to the last close price and a massive 35.7% discount to where the Sayona Mining share price ended last week.

The reports states that these funds will be used to support the restart of the aforementioned NAL project, development activities at its Authier mine, exploration at the Moblan project, and the assessment of downstream processing alternatives. All these activities are located in Canada’s Quebec, where the company is aiming to build a lithium hub.

Motley Fool contributor James Mickleboro 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 Scott Phillips.

More on Capital Raising

Female doctor with a mask holds out hand in a stop gesture.
Capital Raising

Up 90% in 2 weeks, here’s why the Paradigm share price has been halted

The biopharmaceutical company is planning a capital raise.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Capital Raising

Why did the Arafura share price plunge 19% today?

The mineral exporer emerged from a trading halt this morning.

Read more »

A man sits uncomfortably at his laptop computer in an outdoor location at a table with trees in the background as he clutches the back of his neck with a wincing look on his face.
Capital Raising

Orica share price plummets 10% following successful cap raise

The stock has returned to trade this morning, posting a disappointing tumble.

Read more »

A person wrapped in warm clothing with head, eyes and face covered by a hat, glasses and a scarf is coated in a layer of snow and ice. representing Strike Energy's trading halt today
Share Market News

Copper and cash: Why this ASX mining share is on ice today

What did Cobre Limited announce this morning?

Read more »

Falling ASX share price represented by toddler nosediving over cushion onto floor
Capital Raising

Why is the Bubs share price sinking 7% on Friday?

What's caused Bubs shares to tumble today?

Read more »

Giant magnet attracting banknotes to symbolise a capital raising
Bank Shares

ANZ share price edges lower after capital raising

ANZ has raised funds for the Suncorp Bank acquisition...

Read more »

A woman holds her hands to her face in shock and fear with a worried expression on her face as many ASX 200 shares hit 52-week lows today
Capital Raising

Why is the Bubs share price crashing 15% today?

The Bubs share price is crashing on Wednesday. What's happening?

Read more »

A person holds a stop sign in front of their head
Consumer Staples & Discretionary Shares

Why is the Bubs share price in a trading halt?

The Bubs share price has been halted. What's going on?

Read more »