The Sayona Mining Ltd (ASX: SYA) share price has returned from its trading halt and sunk deep into the red.
At the time of writing, the lithium developer's shares are down 14% to 18 cents.
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Why is the Sayona Mining share price sinking?
The Sayona Mining share price is falling today after the company announced the completion of an underwritten institutional placement.
According to the release, the company has successfully raised $200 million from institutional investors at 18 cents per new share. This represents a 14.3% discount to where its shares were trading prior to the halt.
Why is Sayona raising funds?
Management advised that the funding will expedite the development of Sayona's emerging northern Québec lithium hub, centred on its Moblan Lithium Project, where a 60,000m drilling campaign is currently underway.
It notes that a resource upgrade is anticipated following completion of the drilling, with feasibility studies continuing on a new mining operation located near established infrastructure and with potential for downstream processing.
In addition, Sayona's flagship NAL operation is continuing its production ramp‐up. The new funding will support expedited mine development studies, assessment of downstream options, including lithium carbonate production, and associated infrastructure planning. Additional spending is also anticipated on project infrastructure, with NAL forming the centre of Sayona's Abitibi lithium hub.
Sayona's Managing Director, Brett Lynch commented:
The success of this capital raise highlights the market's confidence in our strategy and we are delighted to welcome a number of new institutional investors to the register, together with receiving strong support from existing investors and management.
This funding will speed the growth of our resource base and bring extra tonnes to the market more quickly, as we continue our advance towards becoming North America's first vertically integrated lithium producer.
