The West Wits Mining Limited (ASX: WWI) share price is sinking on Wednesday following the launch of a non-renounceable rights issue.
Just after midday, the gold miner's shares are down 17.95% to 3.2 cents apiece. This means that its shares have now lost more than a quarter of their value in the past month alone.
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West Wits progresses equity raise
Investors are offloading West Wits shares after the company announced a rights issue that will dilute shareholdings.
According to its release, West Wits advised it has launched a non-renounceable rights issue to raise up to $7.86 million before costs. The 1-for-6 pro-rata rights issue is eligible to shareholders at 3 cents per share.
In addition, the company completed a share placement through sophisticated and professional investors to raise $1.6 million before costs. The offer price listed at 3.2 cents each, representing a 21% discount to the 15-day volume weighted average price (VWAP).
Every 2 shares under the placement are accompanied by 1 free-attaching option with an exercise price of 12 cents. These are the same terms as the existing quoted options, and the expiry date is 10 August 2022.
The funds received will be allocated to support the company's growth plans at the Witwatersrand Basin Project. In particular, West Wits is aiming to continue ramping up underground mine development towards first ore production in Q1 2022.
West Wits managing director Jac van Heerden commented:
Following the granting of the mining right and completion of the Qala Shallows (Stage 1) DFS in Q3 2021, West Wits has rapidly advanced site establishment, mine development and the Early Mining Initiative at the Witwatersrand Basin Project in South Africa.
The additional funding will allow us to continue the momentum towards first ore production scheduled for Q1 2022, in addition to progressing our exploration at the Mt Cecelia Project in Western Australia.
About the West Wits share price
With Wednesday's fall, the West Wits share price has declined by 62% since this time last year. Although most of the losses came have come recently. Investors have seen the company's shares shed 55% year to date.
West Wits commands a market capitalisation of roughly $59.37 million, with more than 1.52 billion shares outstanding.
