The WA1 Resources Ltd (ASX: WA1) share price has returned from its trading halt with a bang.
In early trade, the rare earths explorer's shares jumped as much as 70% to $3.02.
The WA1 share price has eased a touch since then but remain up 45% to $2.57.
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Why is the WA1 share price rocketing higher?
Investors have been buying the company's shares today after it announced firm commitments for a placement of new shares to institutional and sophisticated investors to raise $10 million before costs.
According to the release, the placement is being undertaken at $2.00 per new share. Unlike most placements, which are operated at a discount, WA1 has been able to raise these funds at a 13% premium to the WA1 share price prior to its halt.
Why is WA1 raising funds?
WA1 revealed that the funds will be used to advance the recent Luni and P2 Niobium-REE mineralised carbonatite discoveries in the West Arunta project in Western Australia.
WA1's Managing Director, Paul Savich, was pleased with the placement outcome and appears very optimistic on the company's future. He commented:
We sincerely appreciate the support from our new and existing shareholders which is enabling us to continue to execute the exploration we're so passionate about. We will maintain our focus to maximise the chance of continuing to deliver positive results for all stakeholders.
Funds raised from the Placement will primarily be applied to a substantial drilling program at our West Arunta Project which will focus on determining the depth and lateral extent of the carbonatite intrusions intersected at Luni and P2. We are also now funded to test more priority targets in the next round of drilling.
