The Ioneer Ltd (ASX: INR) share price is under significant pressure on Friday.
In morning trade, the ASX 300 lithium stock is down a sizeable 17% to 9.5 cents.
The catalyst for today's decline has been news that the emerging lithium–boron producer has raised capital through a placement.
According to the release, the ASX 300 lithium stock has received firm commitments from institutional, professional, and sophisticated investors to raise approximately US$16 million (~A$25 million).
These funds will be raised through a single-tranche placement comprising the issue of approximately 253 million new fully paid ordinary shares at an issue price of 10 cents per new share. This represents a 13% discount to its last closing price.
The company advised that the placement was strongly supported by new and existing shareholders, which it believes reflects the world class nature of its Rhyolite Ridge Lithium-Boron Project.
The Rhyolite Ridge Lithium-Boron Project is the only known lithium-boron deposit in North America, one of only two known such deposits in the world, and a key project in Nevada's burgeoning Lithium Loop. The company has offtake agreements with Ford Motor Company and Prime Planet & Energy Solutions (joint venture between Toyota and Panasonic), and Korea's EcoPro Innovation.
Management highlights that this equity raising will provide critical funding that will support the company through to completion a strategic partnering process and then to a final investment decision.
It will now seek to raise a further US$3.3 million (A$5 million) from retail shareholders through a non-underwritten share purchase plan (SPP). These new shares are being offered to eligible shareholders at the same price as the placement.
The ASX 300 lithium stock's executive chair, James Calaway, was pleased with the placement. He said:
Rhyolite Ridge continues to demonstrate it is a world-leading lithium project, helping accelerate the electric vehicle transition and securing a cleaner future for our children and grandchildren. This Placement represents another step forward towards ensuring this world-class project operates efficiently and sustainably.
This sentiment was echoed by the company's managing director, Bernard Rowe. He commented:
Ioneer is pleased to announce the successful completion of the Placement with strong engagement from new and existing investors, signalling market confidence the Rhyolite Ridge Project despite significant headwinds in the lithium market.
Following today's decline, the lithium developer's shares are down approximately 40% since the start of the year.
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