Why is the Westgold (ASX:WGX) share price falling 14% today?

The company's shares are being sold off on Monday.

| More on:
Gold nugget with a red arrow going down.

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

Key points

  • Westgold Resources shares down 14.34% to $2.09 after being temporarily halted 
  • The company advised it has successfully raised $100 million through a share placement 
  • Proceeds of the equity raise will go towards developing its Murchison and Bryah assets 

The Westgold Resources Ltd (ASX: WGX) share price has come out of a trading halt to record heavy falls today. This follows the gold resource company's update in regards to its recent share placement.

During early afternoon trade, Westgold Resources shares are down a sizeable 14.34% to $2.09 apiece.

What's dragging Westgold Resources shares lower?

Investors are scrambling to sell Westgold Resources shares as the company prepares to dilute existing shareholder value.

According to its release, Westgold Resources advised it has received strong support to raise $100 million through a share placement.

The offer was presented to both institutional and sophisticated investors at an issue price of $2.10 per share. This equates to roughly 48 million new ordinary shares being added to the company's registry.

The shares will fall under the company's listing rule 7.1. This allows up to 15% of Westgold Resources shares to be issued without shareholder approval.

The funds collected from the placement will be used to accelerate Westgold Resources' Murchison and Bryah growth strategy. This revolves around establishing a systematic pathway towards building a 400,000 ounce per annum gold production rate from FY24.

As such, Westgold Resources is targeting the following:

  • Increasing existing Murchison mine production – the Bluebird UG Expansion Project
  • Accelerating new Murchison mine production – the Fender UG Development Project
  • Advancing strategic development assets across the Murchison and Bryah
  • Tuckabianna and Fortnum mill expansions – expand group processing capacity above 4Mtpa

Westgold Resources executive director, Wayne Bramwell commented:

The scale of market support of this placement strongly endorses Westgold's growth plans and speaks to the growing momentum and the evolution of our business.

Westgold will systematically deploy these funds to expand gold production in FY23 and FY24 from Bluebird, Fender and the Tuckabianna trend, underpinning the expansion of our processing hubs. Concurrently, and with a view to FY24 onwards we will rapidly advance the strategic and iconic high- grade Great Fingall and Golden Crown mines.

About the Westgold Resources share price

Over the past 12 months, Westgold Resources shares have moved in circles before accelerating on an upwards trajectory since February.

The company's share price is flat since this time last year, but up by around 2.5% year to date.

Westgold Resources has a market capitalisation of roughly $889.29 million, with almost 425.5 million shares on its books.

Should you invest $1,000 in Ansell Limited right now?

Before you buy Ansell Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Ansell Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

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 Capital Raising

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Real Estate Shares

Goodman share price dips then lifts amid capital raise falling flat

Only $5.1 million was raised in Goodman's $400 million share purchase plan offer for retail investors.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Financial Shares

Undercover surging payments company announces $45 million capital raise

It's been a busy time for this payments company.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Capital Raising

Why did this ASX All Ords defence stock crash 22% today?

Investors seem to be rather furious at this stock.

Read more »

Man with a hand on his head looks at a red stock market chart showing a falling share price.
Capital Raising

Why is the Goodman share price crashing 7% today?

Let's find out what is weighing down this blue chip this morning.

Read more »

A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.
Earnings Results

Why are Goodman shares in a trading halt on results day?

What's going on with this blue chip on Wednesday? Let's find out.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Technology Shares

Why is this ASX All Ords stock crashing 10% on Friday?

This share is having a tough time. What's going on?

Read more »

A man looking at his laptop and thinking.
Capital Raising

Guess the ASX All Ords stock launching a capital raising at a 52-week low

After failing last month, the struggling company is trying again.

Read more »

Shot of a young businesswoman looking stressed out while working in an office.
Healthcare Shares

Why is the Mesoblast share price crashing 9% today?

What is weighing on this high-flying stock on Tuesday? Let's find out.

Read more »