Why is the Metalstech (ASX:MTC) share price sliding 8% on Wednesday?

The company's shares are taking a breather today…

| More on:
Downward red arrow with business man sliding down it signifying falling asx share price.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Metalstech Ltd (ASX: MTC) share price is deep in negative territory on Wednesday. This comes after the gold explorer provided a market sensitive release yesterday afternoon.

At the time of writing, Metalstech shares are down 8.70% to 63 cents a pop. However, today's fall is most likely attributed to some heavy profit-taking by investors. The company's shares are up almost 20% for the week and 130% in a month.

What did Metalstech announce?

According to its release, Metalstech advised its wholly-owned subsidiary Winsome Resources, has signed a binding agreement with China Jushi.

Founded in 1998, China Jushi is the largest fibreglass manufacturer in China. The company specifically produces glass fibres, advanced composite materials and other products.

International operations extend out to North Carolina in the United States, with sales across a number of countries worldwide.

Under the agreement, China Jushi will subscribe for up to 9.9% of all shares issued in the proposed Winsome float. This equates to around $2.7 million in value, bringing the total float amount to $5.7 million. The remaining $3 million is being committed by North America's Lithium Royalty Corp.

The issue price per share is listed at 20 cents each for China Jushi, acquiring roughly 13.5 million shares.

Metalstech shareholders are expected to receive about $9 million worth of shares in Winsome by a way of distribution. This translates to 45 million Winsome shares (1 free share held for every 3.68 Metalstech shares held).

Metalstech chair Russell Moran, touched on the strategic commitment, saying:

The Winsome team have done a fantastic job courting leading industry participants to support their lithium business vision. Metalstech shareholders eligible at the record date will capitalise on what is shaping up to be a fiercely sought-after battery metals focussed share offering through proposed in-species distribution.

About the Metalstech share price

It has been an astounding year for Metalstech shares, accelerating close to 300% in a year. When looking at 2021, its shares are up 200% and reached a record high of 80 cents on Monday.

Metalstech has a market capitalisation of roughly $101.82 million, and approximately 165.56 million shares on its books.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Materials Shares

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.
Materials Shares

Why are Fortescue shares charging higher today?

What is getting investors excited today? Let's find out.

Read more »

Business people discussing project on digital tablet.
Materials Shares

What does Macquarie think Liontown Resources shares are worth?

Let's see if analysts think that this lithium miner is in the buy zone or best avoided.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Materials Shares

Lynas shares charge higher on big news

What is getting investors excited today? Let's find out.

Read more »

Lion holding and screaming into a yellow loudspeaker on a blue background, symbolising an announcement from Liontown.
Materials Shares

Liontown Resources shares roar higher on big news

This lithium miner is catching the eye with some big news. Here's what is happening.

Read more »

Image of young successful engineer, with blueprints, notepad and digital tablet, observing the project implementation on construction site and in mine.
Materials Shares

What does Macquarie think BHP shares are worth?

Is now a good time to buy the miner's shares? Let's find out.

Read more »

Middle age caucasian man smiling confident drinking coffee at home.
Materials Shares

What does Macquarie think Pilbara Minerals shares are worth?

Is this lithium miner dirt cheap? Let's find out.

Read more »

Two miners standing together.
Materials Shares

Is it time to buy this beaten down lithium share?

This diversified miner’s share price has been hit on multiple fronts. What does it mean for investors?

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Materials Shares

Pilbara Minerals share price falls on 30% quarterly revenue slump

ASX investors are bidding down Pilbara Minerals shares on Thursday. Here’s why.

Read more »