The Core Lithium Ltd (ASX: CXO) share price won't be going anywhere for the moment.
This comes as the company requested that its shares be placed in a trading halt.
At the time of writing, the lithium developer's shares are frozen at $1.105 apiece. It's worth noting that Core Lithium shares have lost more than 20% in value over the past week.
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Why is the Core Lithium share price halted?
According to its latest release, Core Lithium is launching a fully underwritten $100 million institutional placement.
This comprises 97.1 million new fully paid ordinary shares that will be created at a price of $1.03 per share. The offer represents a 6.8% discount to the last close price on 29 September.
Core Lithium noted the recent exploration success and favourable lithium pricing market, in which it intends to "pursue new and aggressive exploration programs".
The company is seeking to expand its ore reserves and mineral resources through its drilling campaign at the Finniss Lithium Project in the Northern Territory.
Core Lithium advised it is on schedule to deliver the first lithium concentrate production in the first half of 2023.
What will the funds be used for?
The monies raised from the capital raise will be used to fund a number of initiatives that include the following:
- Accelerated resource definition, extensional and exploration drilling;
- Advancing development of the proposed BP33 underground mine;
- Introducing a night shift to facilitate an accelerated commissioning of the Finniss concentrator;
- Enhancing project management and corporate development capabilities; and
- Working capital.
Core Lithium CEO Gareth Manderson commented:
The Placement enables Core to pursue several new growth initiatives. We will be well-funded for a larger exploration campaign on our prospective landholding.
Recent exploration success at BP33, Core's proposed second lithium mine, supports the deployment of growth capital and project development, enabling Core to capitalise on the current strength in lithium prices.
About the Core Lithium share price
Despite tumbling this month, the Core Lithium share price has posted a gain of almost 90% in 2022.
In contrast, the S&P/ASX 200 Materials Index (ASX: XMJ) is up down 8% year-to-date.
Based on valuation grounds, Core Lithium has a market capitalisation of approximately $1.92 million with roughly 1.74 billion shares outstanding.
