The Australian Vanadium Ltd (ASX: AVL) share price is slipping today, down 4.3% in afternoon trade.
Shares in the vanadium explorer closed yesterday at 4.7 cents and are currently trading for 4.5 cents.
Atop broader weakness in the ASX resources sector today, here's what looks to be impacting the company.
Share purchase plan opens today
The Australian Vanadium share price is in the red after the company reported that its share purchase plan (SPP) is now open.
Eligible shareholders can invest as much as $30,000 in new AVL shares at the offer price of 4.7 cents. That's 17.5% below the Australian Vanadium share price on 17 May, the company's last day of trading before announcing the SPP offer.
The company is looking to raise $7.5 million but said it could raise more if there was sufficient investor appetite. And it may be the idea of unspecified additional share dilution that's seeing the resource explorer trade lower today.
Commenting on the reasoning behind the capital raising, Australian Vanadium chairman Cliff Lawrenson said:
The funds raised under the Placement and SPP will be used to fund ongoing work at the company's Australian Vanadium Project and to develop key downstream markets ahead of finalising debt financing and a Final Investment Decision, and for working capital, including costs.
In a separate announcement this morning, the company reported that its 100% owned subsidiary, VSUN Energy, has signed a memorandum of understanding (MOU) with North Harbour Clean Energy.
The MOU opens the door for VSUN Energy to help develop vanadium redox flow batteries being developed by North Harbour Clean Energy.
Commenting on the agreement, Australian Vanadium managing director Vincent Algar said: "Jointly the companies aim to grow the Australian vanadium energy storage sector and do justice to this Australian invented technology."
Australian Vanadium share price snapshot
The Australian Vanadium share price has come under selling pressure since hitting five-year highs of 9 cents on 1 April.
Despite a significant retrace since those highs, shares remain up 50% year-to-date. That compares to the 7% loss posted by the All Ordinaries Index (ASX: XAO) so far in 2022.