Two ASX shares that have been sold-off recently may have caught a break as brokers just upgraded them to “buy”.

The upgrade comes the S&P/ASX 200 Index (Index:^AXJO) jumped over 1% as it bounced from a four-month low.

One of these upgraders is the Uniti Group Ltd (ASX: UWL) share price, which tumbled 10% over the past two weeks.

ASX shares with “buy” upgrade catalysts

The sell-off comes after one of its directors, Vaughan Bowen, was charged with insider trading. He denies the charges.

Regardless of the outcome, Bell Potter does not see this as having a material impact on Uniti.

“In our view the potential positive catalysts for Uniti over the next several months far outweigh the potential negatives from the charging of Vaughan Bowen,” said the broker.

“The potential catalysts include a strong trading update at the AGM in November, an announcement on capital management, a strong 1HFY22 result in February and perhaps even a takeover offer (given we believe Uniti is a target).”

Uniti share price could get an extra boost

Bell Potter upgraded the Uniti share price to “buy” from “hold”. It also reiterated its 12-month price target of $4.50 a share.

Importantly, the broker’s upside prediction does not include any capital management initiatives or dividends. This is despite management signalling that this is under consideration.

ASX shares upgraded to “buy” after big fall

Another ASX shares to get upgraded is the Codan Limited (ASX: CDA) share price. The communications and mining equipment supplier has shed more than 30% of its value since its full-year result.

The de-rating in the Codan share price comes even as the company delivered earnings that were 3% ahead of consensus.

Investors may have dumped the shares on its conservative FY22 outlook and news that its well-regarded CEO Donald McGurks is retiring, noted Moelis Australia.

Outlook could surprise on upside

“In our view, management’s commentary at the Aug’21 result suggested a broadly flat organic growth outlook for FY22 (which we believe the market is now pricing in),” said the broker.

“However, we note that CDA has a 5-year track record of overachieving conservative outlooks.

“We estimate at least $5m of organic EBITDA growth is achievable in FY22e largely based on incremental sales from the new GPX6000 gold detector.”

With the Codan share price trading at around a FY22 price-earnings (P/E) multiple of 19 times, compared with 27 times before the results, Moelis believes now is the time to buy Codan shares.

As such, Moelis upgraded the Codan share price to “buy” from “hold”. Its 12-month price target is $17.12 a share.

The post Brokers just upgraded these underperforming ASX shares to “buy” appeared first on The Motley Fool Australia.

More reading

• What’s the latest news on the Evergrande share price?
• Why the ANZ (ASX:ANZ) share price has lagged the ASX 200
• Why ASX 200 travel shares are having a bumper day
• A budget blowout and a volatile ASX 200. Scott Phillips on Weekend Sunrise
• Is the ASX open and trading today?

Motley Fool contributor Brendon Lau 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 recommended Uniti Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Insurance Australia Group Ltd (ASX: IAG) share price has edged higher in trade on Monday, closing at $4.94 apiece.

That’s an 8.5% decrease in the last month for the insurance giant, on the back of a choppy year to date.

With this in mind, it’s worthwhile checking the rearview mirror to see what have been the best periods of performance for the IAG share price.

What was the best day for IAG shares?

To check which day was the best for IAG’s share price, we don’t have to look back very far.

It was only in mid 2019 when IAG shares were changing hands at almost $9 a piece.

Alas, the best day for the IAG share price was on 25 July 2019, where it hit a high of $8.72, a whopping 76% premium to its current market price. However, it did hit an intraday high of $8.89 on 26 June 2018.

There was one period where IAG showed similar strengths, with its share price climbing to around the same level in July of 2018.

However, it wasn’t strong enough to break past this barrier in both 2018 and 2019. Combined with the findings of IAG’s misconduct from the Royal Commission into Banking and Finance, the IAG share price has plummeted to all-time lows as of this year.

This marks a difficult journey for long-term IAG shareholders, particularly those who’ve held since the company’s initial public offering (IPO) around the year 2000.

Stepping back and looking at its share price chart over this time, there is a series of large price swings both up and down, with the IAG share price now hovering around its 2004 levels.

Depending on timing, however, it still may be a more suitable return for longer-term holders. For instance, if one bought in the lows of around $3 per share in 2012, this would still equal a sizeable 60%+ return in this time.

Nonetheless, IAG shares are well off their highs of almost $9 achieved back in 2018 and then once again in 2019, with their best day occurring in June 2019.

IAG share price snapshot

The picture doesn’t change too much when honing in on a single-year view of the IAG share price.

After a period of high volatility, where its share price chart looks like a 9.0 earthquake Richter scale drawing, it has gained a paltry 43 cents per share in the last 12 months.

This is despite reaching highs of $5.45 three times on separate occasions this past year.

The post When was the best ever day on the IAG (ASX:IAG) share price chart? appeared first on The Motley Fool Australia.

More reading

• Why this broker thinks the IAG (ASX:IAG) share price is a bargain
• Top brokers name 3 ASX dividend shares to buy today
• The IAG (ASX:IAG) share price is down 10% so far in September. What’s next?
• How has the IAG (ASX:IAG) share price been performing since reporting results?
• Why Adbri, AusNet, IAG, & Premier Investments shares are falling

The author Zach Bristow has no positions 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 owns shares of and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Pilbara Minerals Ltd (ASX: PLS) share price is rolling over right after its rally to all-time highs of $2.53 a month ago.

At market close, Pilbara Minerals is down 2.32% to $1.895. Earlier during trade, Pilbara was down 2.84% to a 2-month low of $1.885.

What’s driving the Pilbara Minerals share price lower?

Lithium prices finish September near record highs

Lithium prices continued to accelerate in the first two weeks of September, underpinned by an uplift in demand and tight supply according to Benchmark Mineral Intelligence.

The pricing agency reported that technical and battery grade lithium carbonate prices in China have increased over 20% in the first half of September, and are up 188.9% and 215% respectively.

This is broadly in line with the Pilbara Minerals share price surging to an all-time high of $2.53 on 15 September.

More recently, Fastmarkets reported a slight pause in Chinese lithium prices in the week to Thursday 30 September, following the country’s week long National Day public holiday.

Its report flagged “sentiment turning slightly more cautious owing to power restrictions being implemented in some battery materials production hubs.”

Market sources said that certain production hubs of battery and cathode materials were hit with 30-70% production curbs.

Lithium and battery ETF retreats from highs

The Global X Lithium and Battery Tech Exchange Traded Fund (ETF) retreated on Friday night, down 0.77% to US$81.33. The Lithium ETF is down about 6.5% from September 15 highs of US$87.02.

The Lithium ETF invests in the full lithium cycle, from mining and refining the metal, to battery production and electric vehicles.

Its main holdings include heavyweight producers such as Albemarle Corp and Ganfeng Lithium, but it also has smaller allocations in ASX-listed companies such as Mineral Resources Limited (ASX: MIN), Orocobre Limited (ASX: ORE) and Pilbara Minerals.

The ETF’s recent pullback might mean that the Pilbara Minerals share price isn’t falling in isolation, but rather, that broader selling is taking place across the lithium supply chain.

Pilbara Minerals share price breaks below $2

The Pilbara Minerals share price previously bounced strongly off of $2 on multiple occasions.

It plunged 5.6% on 20 August, closing at session lows of $2.02. This was then followed by a sharp rally to highs of $2.35 in the next two days.

Pilbara Minerals hit $2 again on 27 August and 9 September but rallied strongly in the following sessions.

On this occasion, the Pilbara Minerals share price is breaking towards the downside amidst a weak S&P/ASX 200 Index (ASX: XJO).

The post Why is the Pilbara Minerals (ASX:PLS) share price down 10% in a week? appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most active ASX 200 shares this Friday
• Why CBA, Mount Gibson, Pilbara Minerals, & Virgin Money shares are dropping
• Here are 3 ASX 200 shares topping the volume charts so far today
• Why are Pilbara (ASX:PLS) shares getting so much attention lately?
• ASX lithium shares slide as increasing supply pushes prices down in China

Motley Fool contributor Kerry Sun 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 Bruce Jackson.

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The Santos Ltd (ASX: STO) share price spent today in the green despite no news released by the company.

However, awareness of the company’s carbon capture and storage (CCS) projects increased today.

On Friday, the Australian Government announced the Emissions Reduction Fund would provide carbon credits for CCS projects. Carbon credits can be used to offset an entities emissions or sold on the private market.

Santos welcomed the decision. It will now begin working to register its Moomba CCS Project with the Clean Energy Regulator.  

As a result of CCS’s recognition as a viable method of reducing emissions, Santos’ up and coming project is back in headlines today. The extra attention might have boosted the company’s share price higher.

The Santos share price finished Monday’s session trading at $7.08, 1.72% higher than its closing price on Friday.

That’s a slightly better performance than that of the broader market. The S&P/ASX 200 Index (ASX: XJO) was up 1.1% while the All Ordinaries Index (ASX: XAO) gained 1%.

Let’s take a closer look at the latest news around the energy producer.

Santos to receive carbon credits for Moomba

The Santos share price was up on Monday amid more attention on its upcoming CCS project.

The Moomba CCS Project is a disused gas reservoir that will soon store 1.7 million tonnes of carbon emissions each year.   

Under the Emission Reduction Fund, CCS projects like Moomba will now be eligible to receive carbon credits.

For every tonne of carbon stored in a Santos’ CCS project, the company can receive one carbon credit. Carbon credits can be used to offset companies’ emission outputs. They can also be sold for profit.

Right now, the spot price of an Australian carbon credit is around $26.

Despite the government’s announcement and Santos’ acknowledgement of the changes, the Santos share price fell 2.2% amid the broader market sell-off on Friday.

However, it picked up again today.

Commentary from management

Santos CEO and managing director Kevin Gallagher welcomed the news, saying:

The Australian Government’s focus on CCS and other low-emission technologies sets Australia up to capitalise on our natural assets and become a carbon storage superpower, building on the position we have established as an energy superpower over more than half a century.

With the new CCS method now approved, Santos will seek to have the Moomba CCS Project registered and generate ACCUs through the Emissions Reduction Fund. Once the project has been registered, we will be in a position to make a final investment decision to proceed.

Minister for Energy and Emissions Reduction Angus Taylor also spoke of the changes to the fund:

[T]he new Emissions Reduction Fund method will incentive emissions reductions from a range of energy-intensive sectors including LNG production, which currently accounts for around 10 per cent of Australia’s emissions…

This high-integrity method will position Australia to scale up clean LNG production and make use of our abundant geological storage potential.

Santos share price snapshot

Today’s gains included, the Santos share price is 10% higher than it was at the start of 2021.

It has also gained 44% since this time last year.

The post Why did the Santos (STO) share price lift on Monday? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Here are the 3 most active ASX 200 shares this Friday
• Santos (ASX:STO) share price sinks after investor sells $403m stake
• Guess which sector September’s top performing ASX 200 shares all came from
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

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Shares in embattled Chinese real estate giant China Evergrande Group have been suspended today alongside those of its subsidiary, Evergrande Property Services Group Ltd.

The world’s most indebted company announced it had entered a trading halt at around 11am AEST, sending jitters through global stock markets amid rumours the company is gearing up for a big announcement.

With $400 billion in debt, could the Hong Kong-listed Evergrande be about to deliver more worrying news?

The Evergrande share price was trading at around 52 cents ($2.95 Hong Kong dollars) when the company went into the freezer.

Let’s take a look at what we know so far.

Evergrande share price halted on Monday

The Evergrande share price has been frozen without explanation today, sending waves through global markets concerned about the company’s possible collapse and the resulting fallout.

Hong Kong’s Hang Seng Index has fallen 0.4% while Japan’s Nikkei 225 Index is down around 1.2%. Meanwhile, all US futures are in the red.

The ASX appears to be unscathed by the Chinese property giant’s troubles. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) and the All Ordinaries Index (ASX: XAO) are both up around 1%.

It’s unclear why Evergrande’s shares have been halted today. It’s even unclear as to who is responsible for the halt.

What we do know, however, is that the property giant missed an interest payment on Wednesday. That was the second payment Evergrande missed in as many weeks, according to ABC News.

What else is happening?

Interestingly, shares in another Chinese property giant, Hobson Development Holdings Limited, were also frozen this morning.

Hobson stated its trading halt was to do with “a major transaction” that would see it purchasing the shares of another Hong Kong-listed company.

However, as Reuters has reported, there’s nothing beyond a synchronised trading halt tying the two together.

According to Hong Kong Exchanges and Clearing, Hobson Development has a market capitalisation of around $10.67 billion. Whereas, Evergrande has a market capitalisation of around $6.91 billion.

Eagle-eyed market watchers will undoubtedly be keeping a close eye on both Evergrande and Hobson, as well as their share prices, over the coming days.

The post What’s the latest news on the Evergrande share price? appeared first on The Motley Fool Australia.

More reading

• Why the ANZ (ASX:ANZ) share price has lagged the ASX 200
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• Is the ASX open and trading today?
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Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

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The Atomo Diagnostics Ltd (ASX: AT1) share price has stepped into the green today.

Atomo shares are currently in a requested trading halt, however, just prior to this announcement, were trading 1.5% higher on the day at 34 cents apiece.

Read on for more details.

Why is the Atomo Diagnostics share price halted?

Atomo advised just after lunchtime that trading of its shares is halted “pending a market update announcement (from the company) regarding its commercial arrangements with Access Bio Inc”.

The trading halt will remain in effect until 6 October, unless Atomo decides to make the announcement prior to this.

Access Bio is a manufacturer of test-tube diagnostic tests, with specialties in rapid diagnostic tests for malaria and pregnancy.

Recall that Atomo had announced agreements with Access Bio last year to commercialise its rapid antigen COVID-19 tests in the Australian and North American markets.

It has since received regulatory approval in Australia and the US, using Atomo’s Galileo platform to produce a test called CareStart EZ Covid-19 IgM/IgG.

In Q1 of this year, Atomo entered a partnership with Access for the company’s rapid diagnostic COVID-19 tests in the North American Market, with the first product to be delivered in Q3 FY21.

So far the company has sold 1.1 million testing units to Access Bio and other partners for both the European and North American markets under this arrangement.

With the demand for rapid antibody testing for COVID-19 increasing markedly in the last few months, the company is positioned on the supply side in order to match this surge.

As it stands, more than 50 countries are using Atomo’s antigen tests across a broad range of public and private sectors, according to the company.

There is yet to be any word on when Atomo will make its announcement, if or when before the 6 October.

Atomo Diagnostics share price snapshot

The Atomo Diagnostics share price has had a choppy year to date, posting a return of 11.5% since January 1.

It’s rallied 58% this past month and is up a further 17% in the last week.

Despite this, Atomo shares are 9% in the red over the past 12 months, well behind the S&P/ASX 200 index (ASX: XJO)’s climb of about 25% in this time.

The post Why is the Atomo Diagnostics (ASX:AT1) share price halted? appeared first on The Motley Fool Australia.

More reading

• These were the 5 top performing ASX shares in September
• Why the Atomo Diagnostics (ASX:AT1) share price has rallied 15% today
• Why the Atomo Diagnostics (ASX:AT1) share price has soared 30% in a week

The author Zach Bristow has no positions 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 Bruce Jackson.

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The Northern Star Resources Ltd (ASX: NST) share price has leapt into the green since trade commenced this week and now trades at $8.92 apiece.

Northern Star shares have been crawling higher these past few days after hitting a low of $8.26 last week, but they have still marched lower from $10 back in July.

Read on for more details.

Why is the Northern Star share price gaining today?

Whilst there’s been no market sensitive information for the gold mining company, it’s worth noting that the price of gold has popped higher since we started the month.

After trending downwards lately, the price of gold bottomed out at a low of US$1,723/t.oz on 30 September, surging to US$1,761/t.oz on the same day.

This US$38 per troy ounce intraday gain has certainly got investors’ attention and has pushed the ASX gold basket higher over these past few days.

And it’s come up again since this point, now trading at US$1,759/t.oz, at its February and April 2021 levels.

Northern Star is an ASX resources share that is in a unique position, in that it is in the business of mining and processing gold deposits.

As such, it must accept the spot and/or forward price of gold in the commodity markets, and is considered a price taker.

This means its share price can and does fluctuate with the volatility in the underlying commodity markets. In Northern Star’s case, the fluctuations in the price of the precious metal.

In light of the relationship between Northern Star’s share price and the price of gold, it starts to make sense why it is off to a good start this week.

However, it has a ways to go to reverse its recent performance, as the Northern Star Resources share price has slumped 8.5% into the red this past month.

Northern Star Resources share price snapshot

The Northern Star Resources share price has struggled this year to date and has missed its benchmarks completely.

It now trades 30% in the red since January 1, extending its gain over the past year to 35%. This is well behind the S&P/ASX 200 index (ASX: XJO)’s return of around 25% in this time.

The post Here’s why the Northern Star (ASX:NST) share price is having a good start to the week appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Why Evolution, Northern Star, Weebit Nano, & Whitehaven Coal are rising
• Here’s why the Northern Star (ASX:NST) share price has lost 11% in 2 weeks
• Why the Metalstech (ASX:MTC) share price hit a record high today
• 5 things to watch on the ASX 200 on Tuesday

The author Zach Bristow has no positions 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 Bruce Jackson.

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The S&P/ASX 300 Index (ASX: XKO) is pushing upwards today, recovering lost ground from Friday’s 2% plunge.

At the time of writing, the ASX 300 is up 0.98% to 7,260.1 points. It’s worth noting that in the past month, the index has lost around 3.5%.

Here are some of the top movers on the ASX 300 today.

Yancoal Australia Ltd (ASX: YAL)

The Yancoal share price is picking up steam, up 15.33% to $3.46 despite no new company announcements.

The energy producer has seen its shares surge today as the spot price of coal has continued its impressive trajectory. The current price is fetching for a record high of US$228 a tonne, buoyed by severe power shortages across Asia.

China and India are facing a power crisis as coal stocks run dangerously low. India is said to have just 4 days’ worth of coal, down from 13 days of supplies in August.

Neighbouring China is also encountering issues with blackouts across the country, particularly as winter begins to set in.

Flight Centre Travel Group Ltd (ASX: FLT)

Following suit is the Flight Centre share price, up 8.60% to $23.73.

The travel agent has taken off since reporting its full-year results to the market in August, highlighting the worst has passed.

Australia’s accelerated vaccination program is on track, with selected international travel set to resume as early as next month. It appears investors are optimistic on Flight Centre shares, preparing for a strong comeback as a more agile business.

Paladin Energy Ltd (ASX: PDN)

Making headlines again is the Paladin share price, up 7.64% to 77.5 cents.

The uranium company also hasn’t released any market-sensitive news to the ASX.

However, its shares are rebounding after being sold off in the past week, down almost 7%.

The company’s share price is up by more than 560% since this time last year, and up 220% year-to-date.

In late September, Canaccord weighed in on Paladin shares, raising its price target by 70% to $1.02. Based on the current share price, this implies an upside of around 25%.

And the ASX shares in decline?

Novonix Ltd (ASX: NVX)

Heading south is the Novonix share price, down a sizeable 13.28% to $5.68.

The lithium company’s shares appear to be cooling off after registering a sharp upwards trajectory since August.

Novonix shares have accelerated by almost 120% from the start of August, and are up 460% in a year.

Imugene Limited (ASX: IMU)

Also running at a loss is the Imugene share price, down 5.89% to 44.7 cents.

The Australian immuno-oncology focused biopharmaceutical company hasn’t released any market-sensitive news to the ASX since late last month. However, its shares have tumbled from reaching an all-time high of 51.5 cents on 24 September.

The post Which ASX 300 shares are on the move for the start of the week? appeared first on The Motley Fool Australia.

More reading

• Why is the Novonix (ASX:NVX) share price plunging 12% today?
• Why ASX 200 travel shares are having a bumper day
• Yancoal (ASX:YAL) share price flies 15% as coal prices surge
• Up 7%, the Flight Centre (ASX:FLT) share price is surging. Here’s why
• How did ASX healthcare shares perform in the FY22 first quarter?

Motley Fool contributor Aaron Teboneras 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 recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Air New Zealand Limited (ASX: AIZ) share price is climbing today amid news the company’s chief operating officer has resigned.

At the time of writing, Air New Zealand shares are up 1.90% trading at $1.61.

We take a closer look at what could be lifting the airline operator’s share price.

Air New Zealand COO takes top job at peer company

In today’s release, Air New Zealand advised that chief operating officer Carrie Hurihanganui has resigned from her position.

Ms Hurihanganui will depart the airline for a new role as CEO at Auckland International Airport Ltd (ASX: AIA). The move will happen in early 2022, with Air New Zealand starting its process to appoint a replacement.

Ms Hurihanganui will replace Auckland Airport chief executive Adrian Littlewood who is scheduled to finish up on 12 November. The airport’s corporate services general manager Mary-Liz Tuck will fill CEO position in the interim.

What did management say?

Commenting on the news, Air New Zealand CEO Greg Foran said:

Joining over 22 years ago as an international cabin crew member and rising to lead more than 6000 people, Carrie has developed exceptional leadership skills and operational knowledge.

Carrie has done an exceptional job, especially since COVID began to impact our business. It was no small feat to keep our operations running across engineering, airports, airline operations, properties, supply chain, cabin crew and pilots during a constantly changing crisis…

The surprise personnel loss hasn’t deterred investors, with the Air New Zealand share price continuing to rise.

As Australia is considered New Zealand’s biggest tourism market, a climbing share price might be a reflection of Australia’s accelerated COVID-19 vaccination rollout finally opening the doors to international travel.

The Australian federal government is planning to resume international flights as early as next month.

Air New Zealand share price review

Over the past 12 months, the Air New Zealand share price has travelled more than 20% higher, while year-to-date remains flat.

Its shares ticked up a notch during mid-August just before the company’s earnings results for the 2021 financial year.

Air New Zealand presides a market capitalisation of roughly $1.81 billion and has approximately 1.1 billion shares outstanding.

The post Air New Zealand (ASX:AIZ) share price takes off amid resignation news appeared first on The Motley Fool Australia.

More reading

• Here’s why the Air New Zealand (ASX:AIZ) share price is up 10% in September

Motley Fool contributor Aaron Teboneras 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 Bruce Jackson.

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The King Island Scheelite Limited (ASX: KIS) share price is slipping 6% into the red this afternoon and now trades at 16 cents each.

Kind Island shares are trending down today after the Australian mining company announced a key update earlier.

Here’s what we know.

What did King Island Scheelite announce?

King Island announced that it has secured funding commitments to proceed with the redevelopment of its wholly owned Dolphin Tungsten Project in Tasmania.

It also delivered an investor presentation on the raising, outlining the price.

Announced today was the completion of a $31 million equity raise at 14 cents per share, which also sees King Island investors’ share count diluted by 222 million shares.

There are 2 tranches to the placement, made up of a blend of sophisticated and institutional investors plus the company’s debt holders.

That price of 14 cents per share on which the equity raise was completed, represents a 19.4% discount to the company’s 15-day volume weighted average share price as per the release, and a 12.5% discount to its current share price.

Kind Island Scheelite has raised a total of $88 million in 2021 to finance the redevelopment of the Dolphin site, including a $10 million leasing facility currently in negotiations.

The company intends to fund the purchase of “key equipment, mobile mining equipment, processing plant development, civil/infrastructure construction, working capital associated therewithin” with the net proceeds.

Consequently, the Dolphin tungsten project is expected to produce its first concentrate in the March quarter of 2023, as per the release.

Investors don’t appear to be impressed by the moves, perhaps given the King Island Scheelite share price’s performance this year to date.

Plus, an additional 222 million shares on issue means that current shareholders will be diluted by that amount.

As such, the value of their holdings will diminish slightly as the company’s equity value is re-adjusted from the share issuance.

What did management say?

Speaking on the announcement, King Island Scheelite’s executive chairperson Johan Jacobs said:

Our strategy has allowed us to move forward with our plan to redevelop King Island’s Dolphin Tungsten Mine, which hosts one of the few remaining high quality tungsten deposits in the Western world. Having secured commitments for the funding, we can now continue to execute on our vision to develop world class tungsten mining operations in Tasmania.

King Island Scheelite share price snapshot

The King Island Scheelite share price has booked outsized returns over this past year to date, climbing 60% since January 1.

As such, shareholders have clipped the ticket on a whopping 167% gain over the past 12 months, more than 6x the return of the S&P/ASX 200 index (ASX: XJO)’s climb of 25% in that time.

The post King Island Scheelite (ASX:KIS) share price slips 6% following cap raise appeared first on The Motley Fool Australia.

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• Why the King Island Scheelite (ASX:KIS) share price rose 6% today

The author Zach Bristow has no positions 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 Bruce Jackson.

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