Arafura shares dive after discounted placement
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The news: Shares in Arafura dived on the ASX after the rare earths miner said it had received commitments for its $20 million institutional placement.
The numbers: Shares were down 11.8% to $0.17 by 1:05pm AEST.
Gina Rinehart-backed Arafura said it has received "firm commitments" for its placement, across two-tranches, at an offer price of $0.16 per share. This was a 15.7% discount to its last closing price of $0.19.
The miner aims to raise $14.2 million through the issuing of 88.7 million new shares in the first tranche, and $5.8 million through 36.3 new shares in the second tranche.
Arafura also plans to launch a share purchase plan to raise an additional $7 million.
The context: Perth-based Arafura announced the launch of the capital raising on Wednesday, with the aim of using funding to support the development of its Nolans project in the Northern Territory.
Arafura said the new funds would support advancement of the company's funding initiatives and provide a sufficient cash runway through to mid-2025, to allow it to focus on finalising its strategic equity funding and offtake initiatives required for its final investment decision.
The source: ASX announcement
