Vital Metals Limited (ASX:VML) shares are sliding lower today after the company announced the successful completion of an institutional share placement to fund works at its rare earth mine in Canada.
At the time of writing, the Vital Metals share price is trading 5% lower at 7.6 cents. The rare earth mining company's placement raised $43 million, issuing 661.5 million new shares at 6.5 cents each.
For context, the All Ordinaries Index (ASX: XAO) is also slumping today, down 0.79% for the day so far.
Let's take a closer look at Vital Metals' announcement this morning.
Image source: Getty Images
Canada's first rare earth producer
Vital Metals announced this morning that after a successful share placement, it will begin works at its Nechalacho rare earths project this month.
The project is Canada's first rare earths mining operation. Vital Metals hopes to become the largest independent supplier of clean mixed rare earth feedstock outside of China.
The company claims Nechalacho is one of the highest grade rare earth deposits on earth.
Beyond allowing the commencement of works, the capital raised will also fund construction of an offsite extraction plant and the processing of mining minerals. Additionally, some will go towards drilling to define a plan for stage 2 of the project.
Vital Metals other project, Wigu Hill, will also benefit from the raised capital. Part of it will go towards drilling, sampling and testing at the site.
Commentary from management
Vital Metals managing director, Geoff Atkins, said the company is pleased to receive such strong support:
This support validates our strategy to produce rare earths for a globally diversified supply chain. As demand for critical minerals including rare earths continues to grow, our Canadian based project is positioned to supply customers in North America, Europe and Asia.
This placement ensures Stage 1 operations at Nechalacho are fully funded. We are excited to complete this milestone to allow mining operations to commence as we transition to a rare earth producer next quarter.
Vital Metals share price snapshot
This morning, the Vital Metals share price opened 7.5% lower than Tuesday's close before partially recovering to its current level. This came after the company's shares spent Wednesday and Thursday in a trading halt pending the release of further information on the capital raise.
The company's share price is still up by 147% year to date, having started the year trading at 3 cents. It's also up 640% over the last 12 months.
Vital Metals has a market capitalisation of almost $214 million with approximately 2.6 billion shares outstanding.
