Here’s why the 5E Advanced Materials share price just rocketed 20%

The 5E Advanced Materials Inc (ASX: 5EA) share price has exploded today on a new investment. 

The boron and lithium explorer’s shares are currently trading at $2,53, a 15% gain. However, in earlier trade, the 5E Advanced Materials share price jumped 20%. For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) is down 0.45% today.

So what did 5EA announce to the market today?

$60 million investment

5EA advised that US investor Bluescape will buy $60 million of secured convertible notes.

These notes are convertible into shares of 5EA at an initial conversion price of $17.60. The notes will mature on 15 August 2027 unless converted or rebought prior to this date.

Furthermore, 5EA advised that the construction of a small-scale boron facility (SSBF) is on schedule for completion in the final quarter of this year.

The company is also developing commercial partnerships in the lithium and boron markets. Average boric acid prices have surged by more than 50% in the first calendar quarter of 2022, compared to 2020 and 2021.

Commenting on the news, 5EA president and CEO Henri Tausch said:

We are pleased to partner with Bluescape as they are a respected U.S. institutional investor that offers value to our company far beyond that of a typical financial investment.

We also continue to see tremendous team effort as we advance construction of our Small-Scale Boron Facility towards target CQ4 2022 mechanical completion.

5EA share price snapshot

The 5EA Advanced Materials share price has lost 14% in the year to date. However, in the past month, it has rocketed nearly 26%.

In comparison, the benchmark ASX 200 materials index has lost 4% year to date and surged 8% in a month.

5EA has a market capitalisation of about $729 million based on the current share price.

The post Here’s why the 5E Advanced Materials share price just rocketed 20% appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea 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.

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