Why is WA1 Resources’ ASX mining share climbing 70% on Friday?
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The WA1 Resources Ltd. (ASX:WA1) the stock price came back from its trading stop with a bang.
At the start of trading, shares of the rare earth explorer jumped 70% to $3.02.
WA1’s stock price has fallen slightly since then, but is still up 45% at $2.57.
Why is WA1 stock price soaring?
Investors bought the company’s shares today after it announced firm commitments for a new share offering to institutional and sophisticated investors to raise $10 million before fees.
According to the release, the placement is being undertaken at $2.00 per new share. Unlike most investments, which are operated at a discount, WA1 was able to raise these funds at a 13% premium to WA1’s pre-discontinuation share price.
Why does WA1 fundraise?
WA1 revealed that the funds will be used to advance recent discoveries of Luni and P2 Niobium-REE mineralized carbonatite at the West Arunta project in Western Australia.
WA1 Managing Director Paul Savich was pleased with the outcome of the placement and seems very optimistic about the future of the business. He commented:
We sincerely appreciate the support of our new and existing shareholders that allows us to continue to execute the exploration that we are so passionate about. We will maintain our objective of maximizing the chances of continuing to produce positive results for all stakeholders.
Funds raised from the placement will primarily be applied to a major drilling program on 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.