Why Rex Minerals (ASX: RXM) Share Price Collapsed 16% Today
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the Rex Minerals Ltd. (ASX: RXM) The stock price fell sharply today after breaking out of a trading halt.
At the closing bell, shares of the mining exploration company were trading at 30 cents, down 16.67%.
What has Rex Minerals announced?
A catalyst for today’s fall could be concerns about impending stock dilution. According to its press release, Rex Minerals has successfully raised $ 50 million (before fees) in a two-tranche offering.
The offer received strong support from existing institutional, sophisticated and professional investors. The company has also added new institutional investors to its ledger.
Rex Minerals listed the issue price of 166.7 million new common shares at 30 cents each. This reflected a 14% discount to the last closing price of 35 cents on August 3.
The shares will be divided into two distinct tranches, the first part falling under the company’s 7.1 listing rule. This allows them to issue around 17.8 million shares without shareholder approval.
The second part of the shares (around 148.8 million) will be submitted for shareholder approval at a meeting in September.
All the non-executive directors of the company participated in the placement, these shares also being subject to the approval of the shareholders.
The proceeds of the placement will be used primarily to fund pre-development activities on the Hillside copper project wholly owned by Rex Minerals in South Australia. Additionally, the company will set aside some of the money for its 100% owned Hog Ranch gold property in Nevada, United States.
Rex Minerals Managing Director and CEO Richard Laufmann said:
This is an important milestone for the company and for the development of the Hillside Copper Project. A strong appetite from institutional investors reflects support for the development theme to be part of this nation-building project.
The funds raised put the company in an excellent position to begin pre-development at Hillside while moving towards a final investment decision for Phase 1 at the end of next year, as well as to seek additional value at Hog. Ranch.
About Rex Minerals share price
It’s been a wild ride for Rex Minerals shareholders, as the company’s shares have risen nearly 80% since the start of the year. Longer term, shares of Rex Minerals are up about 38% from the same period last year.
Based on current price, Rex Minerals has a market capitalization of approximately $ 128.8 million, with approximately 422 million shares outstanding.