Why did this ASX mining share rocket 40% on open today?

Vanadium Resources share price person riding rocket indicating share price increaseVanadium Resources share price person riding rocket indicating share price increase

ASX mining share Okapi Resources Ltd (ASX: OKR) set the bar high on Monday.

Shares in the tiny ASX mining stock were up more than 41% in early trading today before some profit taking took place, giving back a lot of those gains.

At market close, the Okapi Resources share price closed up 5.88%, trading for 18 cents per share.

What’s piquing investor interest in the ASX mining share?

The Okapi Resources share price entered a trading halt on Thursday pending the release of a capital raising announcement.

The ASX mining share released that capital raise announcement before market open this morning. And investors appeared enthusiastic with the outcome.

Okapi said it has received binding commitments to raise $5.1 million (before costs) through a placement of approximately 34.2 million shares at an issue price of 15 cents per share. That’s 25% below the current share price, mind you.

Okapi will use the funds to complete its investment in uranium enrichment technology company, Ubaryon Pty Ltd. The miner also plans to advance its Tallahassee, Maybell and Athabasca uranium projects.

The $5.1 million placement will take place in two tranches.

The directors’ participation of $129,000 worth of shares in tranche two of the placement is subject to shareholder approval. That approval will be sought at a general meeting in early April.

Commenting on the capital raise that sent the ASX mining share soaring today, Okapi’s managing director Andrew Ferrier said:

We are delighted to have new institutional and sophisticated investors participating in this placement… We are also very pleased to see the strong support from existing shareholders.

Most importantly, this raising provides Okapi sufficient funding to complete the Ubaryon investment. We are very excited to acquire an interest in Ubaryon’s Enrichment Technology, and it has the potential to add significant value to Okapi and its shareholders.

Okapi share price snapshot

The ASX mining share slid lower during the second half of 2022.

However, as you can see in the chart below, the Okapi share price is up 20% so far in 2023.

The post Why did this ASX mining share rocket 40% on open today? appeared first on The Motley Fool Australia.

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More reading

Motley Fool contributor Bernd Struben 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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