Here are 100 million reasons why Wildcat shares are sinking 7% today

What a transformation this lithium share has had in 2023!

| More on:
A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.

Image 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

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.

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 Materials Shares

A woman screams and holds her hands up in frustration.
Materials Shares

Why are Allkem shares down 11% in November?

This lithium miner's shares were out of form this month/

Read more »

A man slumps crankily over his morning coffee as it pours with rain outside.
Materials Shares

Core Lithium shares sink 8% on broker downgrade

The team at Citi thinks investors should be selling this lithium miner's shares.

Read more »

A businesswoman ponders why her boat is sinking in the ocean.
52-Week Lows

Lake Resources share price falls 7% to new 52-week low amid second strike AGM vote

Chair Stu Crow described "a year of significant progress" amid an 80% decline in the share price in 2023.

Read more »

A worried man holds his head and look at his computer.
Materials Shares

Sayona Mining shares sink to new 52-week low following AGM update

This lithium miner continues to sink deep into the red.

Read more »

A man in a hard hat and high visibility vest holds his thumb up in a gesture of confidence with heavy moving equipment in the background as on a mine site as the Chalice Mining share price rises today.
Materials Shares

Dreadnought share price jumps on 'tier 1 project' potential

This mineral exploration company could be sitting atop a tier one rare earths project.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Materials Shares

Guess which ASX mining stock is up 92% thanks to a potentially 'significant discovery'

This copper explorer is getting investors excited today. But why?

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Liontown shares are down 17% in a month: What's going on?

This lithium share has failed to roar in recent weeks.

Read more »

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.
Materials Shares

Own Rio Tinto shares? Add these dates to your diary in 2024

Here's what Rio Tinto has planned for next year.

Read more »