Wildcat Resources Ltd (ASX: WC8) shares are back from their trading halt on Friday and sinking into the red.
In morning trade, the lithium explorer's shares are down 7.5% to 79 cents.
Why are Wildcat shares taking a hit on Friday?
This high-flying ASX lithium share is falling today after it completed a major capital raising.
According to the release, Wildcat has received firm commitments from institutional and sophisticated investors to raise $100 million before costs.
The company is raising the funds through the issue of 131,578,948 fully paid ordinary shares at a price of $0.76 per share. This represents a discount of approximately 11% to its last close price.
This is quite the achievement for the company given that at the start of the year, its market capitalisation was actually a third of the $100 million it has raised today.
But so much has changed since then thanks to the extremely promising drilling results from its Tabba Tabba Lithium Project in Western Australia.
For example, management recently highlighted that its drilling activities "confirm that Wildcat is uncovering a Tier-1 lithium deposit at Tabba Tabba."
A tier-1 lithium deposit in a world-class mining jurisdiction, it's not hard to see why investors have been so excited.
Commenting on the capital raising, executive director, Matthew Banks, said:
The demand for this Placement was significant, by leading international and domestic institutions, and our existing supportive shareholders. The Placement provides a strong balance sheet that allows the Company to accelerate discovery drilling and progress development studies at our Tabba Tabba Lithium Project. We have an exciting 12 months ahead of us.
Wildcat will use the placement proceeds for a number of activities. This includes exploration, drilling, resource evaluation, and business development at Tabba Tabba.
Funds will also go towards permitting and project development studies, continued exploration at the Bolt Cutter Lithium Project in Western Australia, the Mt Adrah Gold Project in NSW, and other exploration projects.
