The Queensland Pacific Metals Ltd (ASX: QPM) share price surged this morning after the company exited a trading halt with news of a successful capital raise and major financial support.
The company raised $30 million through a placement. Meanwhile, it has received support from Export Finance Australia to secure up to $250 million of debt.
At the time of writing, the Queensland Pacific Metals share price is 2.86% higher at 18 cents.
However, earlier this morning, the company’s stock was trading at 19.5 cents, representing an 11.4% gain.
Let’s take a closer look at today’s news from the critical metals producer.
Queensland Pacific Metals share price gains on Wednesday
The Queensland Pacific Metals share price soared this morning after the company announced it has secured funds for work at its TECH Project. Additionally, the Australian government’s export credit agency has expressed support for the project.
The raised cash will go toward the project’s definitive feasibility study, as well as test work, engineering, and environmental, social, and governance (ESG) initiatives.
Additionally, around $1 million of the capital will go to delineate a maiden JORC resource at the company’s Sewa Bay project.
The TECH Project will process critical chemicals from New Caledonian nickel laterite ore for the lithium-ion and electric vehicle market.
Under the placement, shares in Queensland Pacific Metals were going for 16 cents apiece. That represents an 8.6% discount on the company’s last traded price. It’s also a 7.5% discount on its 5-day volume-weighted average price to 10 December 2021.
According to the company, the placement saw several new offshore investors, some with an ESG focus, added to its register.
The company is also in the running to receive a $250 million debt facility from Export Finance Australia. Before the company is granted the facility, it must pass multiple checks.
These include completing the TECH Project’s feasibility study, providing an engineering strategy, and creating a funding plan.
Right now, the Queensland Pacific Metals share price is 337% higher than it was at the start of 2021. Though, it has fallen 27% over the last 30 days.
What did management say?
Queensland Pacific Metals managing director Dr Stephen Grocott commented on Export Finance Australia’s support:
When combined with the strong interest shown from commercial financiers, we have an increasing level of confidence in securing the appropriate debt funding package for the project. In particular, the conditional support offered by [Export Finance Australia] shows how the TECH Project broadly aligns with the objectives of the Australian Government’s Critical Minerals Strategy and the Critical Minerals Facility.
The post Here’s why the Queensland Pacific Metals (ASX:QPM) share price surged 11% today appeared first on The Motley Fool Australia.
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