29Metals Ltd (ASX: 29M) shares are having a day to forget on Wednesday.
At the time of writing, the ASX copper stock is down 33% to 41.5 cents.
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Why is this ASX copper stock crashing?
The catalyst for today's decline has been news that the copper miner is raising funds at a deep discount.
According to the release, the ASX copper stock has successfully completed the institutional component of its underwritten 1 for 3.66 accelerated non-renounceable entitlement offer.
The institutional entitlement offer will raise approximately $119 million at an offer price of 40 cents per new share. This represents a 35.5% discount to its last closing price of 62 cents.
The ASX copper stock notes that the institutional entitlement offer received strong support from eligible existing institutional shareholders, with existing shareholders (excluding EMR Capital) subscribing for approximately 92% of their entitlements.
New shares that were not taken up by both eligible and ineligible institutional shareholders have been fully allocated to eligible institutional investors.
The company will now push ahead with its retail entitlement offer which is expected to raise approximately $31 million.
The company's CEO, James Palmer, commented:
The level of support shown by our existing shareholders, as well as new investors, has been very encouraging. This equity raising is expected to allow us to maintain our commitments to our strategic growth objectives to accelerate value realisation across the portfolio. Specifically, the ongoing investment in Gossan Valley, progression of a Restart Definitive Feasibility Study at Capricorn Copper and drilling to test priority exploration targets across the portfolio.
I encourage eligible retail shareholders in Australia and New Zealand to consider the terms of the retail entitlement offer when it opens on 28 January 2026.
Why is it raising funds?
The ASX copper stock advised that proceeds of the equity raising will be used for working capital for the impact of Xantho Extended seismicity to facilitate ongoing investment in Gossan Valley, progression of Capricorn Copper towards restart, including a Restart Definitive Feasibility Study and drilling of exploration targets across the portfolio. James Palmer said:
We have a clear plan to recommence mining at Xantho Extended in April 2026. In the meantime, this equity raising is expected to allow us to maintain our commitments to our strategic growth objectives to accelerate value realisation across the portfolio. Specifically, the ongoing investment in Gossan Valley, progression of a Restart Definitive Feasibility Study at Capricorn Copper and drilling to test priority exploration targets across the portfolio.
