The Province Resources Ltd (ASX: PRL) share price is flat today despite providing a positive update to the ASX.
During market open, the minerals producer's shares took off to trade as high as 18.5 cents. However, after some profit taking, Province shares are now selling for 17.5 cents apiece – flat for the day.
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What did Province announce?
Investors appear unfazed by the company's latest announcement on its capital raising efforts, sending Province shares nowhere.
In its announcement, Province advised it has secured firm commitments from professional and sophisticated investors for a capital raising. The $18 million (before costs) placement was offered at a price of 15 cents per share, representing a discount of 16% on today's price.
Province stated that the placement received an influx of applications, highlighting investor interest. Pleasingly for eligible shareholders, there was no mention of a scale back from the heavily oversubscribed equity raise.
In total, 120 million shares will be issued using the company's existing placement capacity under listing rule 7.1. This allows up to 15% of its shares to be issued without shareholder approval.
Settlement of the shares is expected to occur around 27 May 2021.
The funds raised will be put towards advancing the scoping and feasibility studies at its HyEnergy Zero Carbon Hydrogen Project. In addition, Province will also seek to further its mineral exploration portfolio.
Post capital raise, the company noted that cash in the bank stands in excess of $23 million.
Province managing director, David Frances commented:
The strong support demonstrated by the equity capital market and, in particular ESG and other institutional funds, of our vision to be a significant green hydrogen producer and mineral explorer is highly encouraging and allows us to aggressively pursue these goals.
About the Province share price
It's been an interesting 12 months for Province shares, delivering astronomical gains of 2,100% to patient investors. Year-to-date performance has also been superb, jumping more than 1,200% over the 5 months.
On valuation metrics, Province Resources has a market capitalisation of roughly $171 million, with about 980 million shares on issue.
