The share price of ASX lithium hopeful Winsome Resources Ltd (ASX: WR1) has been careening upwards in recent weeks. That is, until today. The stock has been placed in a trading halt this morning.
That's right, the Winsome Resources share price will remain at 84 cents for now.
It's expected to return to trade on an announcement, or Tuesday's open, whichever comes soonest.
So, what's stopping the ASX lithium share from trading on Friday? Keep reading to find out.
Why is the Winsome Resources share price frozen?
The Winsome Resources share price is frozen this morning as the company prepares to release details of a capital raise. Unfortunately, that's all the market has to go off.
Though, news of a capital injection might not come as a major surprise given all the excitement going down with the ASX newbie lately.
It caught the attention of the market on 28 October when it announced encouraging drilling results from its Adina and Cancet projects, both located in Canada. It gained 27% on the back of the update.
The stock posted another 58% gain amid the release of additional updates, this time non-price sensitive, on 2 November.
Finally, in response to an ASX 'please explain' on 4 November, the company said:
With this series of encouraging exploration results being made public, there appears to be a recognition that [the company's] market capitalisation is low when compared with many of its peers in the lithium exploration market.
Well, that appears to have since changed. Winsome Resources currently boasts a market capitalisation of $120 million, according to the ASX. That's up from $54 million at the end of September.
Additionally, the company had $11.9 million in its coffers at the end of the September quarter. It used $1.5 million over the three-month period. That left the company with enough cash to fund an estimated 8.5 future quarters.
The anticipated capital raise will mark the first undergone by the lithium share since it floated on the ASX nearly 12 months ago.
Winsome Resources was spun-out of Metalstech Ltd (ASX: MTC) – raising $18 million by offering new shares for 20 cents as part of its initial public offering (IPO).
