During mid-afternoon trade, Fertoz shares are down 6% to 23.5 cents apiece. In earlier trade, the company's shares had dropped by more than 13% before staging a partial recovery. In comparison, the All Ordinaries Index (ASX: XAO) is up 0.07% to 7,604.80 points.

What's dragging the Fertoz share price lower?

Investors are scrambling to sell Fertoz shares as the company prepares to dilute existing shareholder value.

According to its release, Fertoz advised it has received firm commitments to raise $5 million through a share placement. The offer was presented to both sophisticated and professional investors at an issue price of 15 cents per share. This equates to roughly 33.33 million new ordinary shares being added to the company's registry.

The shares will be split across two separate tranches, with the first portion falling under the company's listing rule 7.1. This allows up to 15% or 20 million new shares to be issued without shareholder approval.

The second portion of shares will be subject to shareholder approval at an extraordinary general meeting (EGM) to be held in 6 weeks.

Proceeds of the placement will be used to accelerate development of the company's carbon division. In particular, this will focus on carbon sequestration, consulting activities, trading and implementation of carbon strategies using Fertoz organic fertilisers.

The remaining monies will be also allocated to recruiting carbon specialists and expanding Fertoz's North American organic phosphate sales team.

Management commentary

Fertoz executive chair Patrick Avery spoke about the placement, saying:

Our Carbon division is an exciting growth opportunity for Fertoz, and we are pleased to receive strong support from new and existing shareholders to enable us to accelerate its development.

Carbon credits are a growing trend right now and we want to capitalise on our position to be a leader in this field. Our Carbon division has already proved popular with customers and will greatly enhance our ESG credentials.

In addition, completing this $5 million placement will enable us to grow our sales team in North America, and it is important to us to continue to scale up our organic fertilizer operations as the foundation of our business across multiple regions.

The Fertoz share price has gained more than 230% over the past 12 months and is also up by over 300% in 2021.

The post Here's why the Fertoz (ASX:FTZ) share price is sinking 6% today appeared first on The Motley Fool Australia.

Shares in the organic fertiliser producer shot up 31% this morning, touching a high of 19 cents apiece. At the market close today, the Fertoz share price had lost some ground and was trading at 16.5 cents, up 13.7%.

Fertoz aims to tackle the issue of high carbon emissions from agriculture through its organic rock phosphate fertiliser product. The company is currently focused on supplying the North American and Australian organic and conventional agricultural markets.

Let's take a closer look.

What did Fertoz announce today?

In an announcement to the ASX today, Fernoz provided an update on its plans to start mining operations at its Fernie Mining Project.

The Fernie project is a large phosphate deposit located in British Columbia, Canada.

According to the release, Fertoz plans to start phosphate mining and extraction operations at Fernie in July 2021 to meet increasing customer demand.

The company said that orders and contracts through the second quarter "have again been very strong" with more than 10,000 tonnes of organic rock phosphate due for filling and delivery.

What did management say?

Fertoz sales vice-president Sean Gatin welcomed the news, saying:

It has long been Fertoz's strategy to open and use Canadian mines to supply Canada, and focus on Montana and Mexico mines for the US market. These improved volumes will allow opening and long term mining of our leases in the Fernie area.

Fertoz share price surges in 2021

It's been a good year so far for the Fertoz share price, which has lifted ~183% year-to-date to a 52-week high of 19 cents.

Back in March, the company announced that it had experienced a "record start to 2021", seeing strong demand from North America, Australia and Philippines markets.

The post Up 240% in June, the Fertoz (ASX:FTZ) share price hit a 52-week high today appeared first on The Motley Fool Australia.