The Anson Resources Ltd (ASX: ASN) share price has come out of a trading halt into a nosedive today.
During early morning trade, the lithium explorer's shares fell to an intraday low of 38.5 cents before recovering some of their losses.
Currently, the share is down 6.47%, trading at 39.8 cents apiece.
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What's driving Anson Resources shares lower?
The Anson Resources share price is tanking after the company announced it had successfully completed a capital raise.
The impending share dilution that will follow may be behind today's sell-off, along with broader weakness on the ASX.
In today's release, Anson Resources advised it has received binding commitments to raise $50 million from global institutional investors.
Interest in the share placement had exceeded the company's requirements, with management deciding to upsize the offer to $50 million.
The placement will see the company issue approximately 139 million shares at a price of 36 cents per share.
This represents a 15.3% discount on the last closing price of 42.5 cents per share on 14 September, before the company entered a trading halt.
The company will use proceeds from the placement to expand its project development workstreams at the Paradox Lithium Project in Utah, USA. This includes front-end engineering design work, permitting and ordering of long lead procurement items.
The company will also work towards a final investment decision (FID) on the project.
The new shares are expected to be issued on or around 27 September.
What did management say?
Anson Resources executive chair Bruce Richardson welcomed the news, saying:
The result of the capital raise is an outstanding endorsement of the Paradox Lithium Project and for 'made in USA' battery grade lithium carbonate.
We were delighted to price the Placement at a tight discount to the prevailing VWAPs, despite immediately following a significant market downward correction.
Anson Resources share price snapshot
Despite today's losses, the Anson Resources share price is up 297% over the last 12 months.
Year-to-date the company's shares are trading 194% higher.
Anson Resources commands a market capitalisation of $409.6 million with approximately 1.03 billion shares on issue.
