The WA1 Resources Ltd (ASX: WA1) share price has returned from its trading halt with a bang.
In early trade, the rare earths explorerâs shares jumped as much as 70% to $3.02.
The WA1 share price has eased a touch since then but remain up 45% to $2.57.
Why is the WA1 share price rocketing higher?
Investors have been buying the companyâs shares today after it announced firm commitments for a placement of new shares to institutional and sophisticated investors to raise $10 million before costs.
According to the release, the placement is being undertaken at $2.00 per new share. Unlike most placements, which are operated at a discount, WA1 has been able to raise these funds at a 13% premium to the WA1 share price prior to its halt.
Why is WA1 raising funds?
WA1 revealed that the funds will be used to advance the recent Luni and P2 Niobium-REE mineralised carbonatite discoveries in the West Arunta project in Western Australia.
WA1âs Managing Director, Paul Savich, was pleased with the placement outcome and appears very optimistic on the companyâs future. He commented:
We sincerely appreciate the support from our new and existing shareholders which is enabling us to continue to execute the exploration weâre so passionate about. We will maintain our focus to maximise the chance of continuing to deliver positive results for all stakeholders.
Funds raised from the Placement will primarily be applied to a substantial drilling program at our West Arunta Project which will focus on determining the depth and lateral extent of the carbonatite intrusions intersected at Luni and P2. We are also now funded to test more priority targets in the next round of drilling.
The post Why is ASX mining share WA1 Resources rocketing 70% on Friday? appeared first on The Motley Fool Australia.
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More reading
- 3 ASX mining shares on ice today pending big news
- Up 1,000% in 3 weeks, what’s setting this ASX mining share off like a rocket?
- Why has the WA1 Resources share price exploded 1,200% in two weeks?
- Up 47% and down 25% in one day, what’s with this ASX mining share?
- Why was this ASX mining share placed on ice after exploding 60% today?Â
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.
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