Why everyone’s watching the Pilbara Minerals (ASX:PLS) share price

The Pilbara Minerals Ltd (ASX: PLS) share price has surged higher in 2020 but remains in a trading halt ahead of a large acquisition.
The post Why everyone’s watching the Pilbara Minerals (ASX:PLS) share price appeared first on The Motley Fool Australia. –

Surprised man with binoculars watching the share market go up and down

The Pilbara Minerals Ltd (ASX: PLS) share price remains in a trading halt at $0.88 per share today after the company announced a $240 million equity raising to support a large acquisition.

Why is the Pilbara Minerals share price in a trading halt?

All eyes are on Pilbara Minerals after the ASX 200 miner entered a trading halt on Friday.

The company has received creditor approval to raise capital for its planned US$175 million acquisition of Altura Project. Pilbara Minerals recently entered into a share sale agreement with Altura Mining Limited and its administrators to acquire all shares of Altura Lithium Operations Pty Ltd (ALO).

Pilbara’s deed of company arrangement (DOCA) received ALO creditors approval with all parties signing off. That has cleared the way for Pilbara Minerals to acquire the neighbouring site for US$175 million.

The acquisition is contingent on Pilbara raising A$240 million in equity to support the transaction. That has put the Pilbara Minerals share price in a trading halt ahead of the planned equity raising.

The $240 million comprises a $119 million placement to Australian Super and Resource Capital Fund VII L.P. alongside a $121 million accelerated non-renounceable entitlement offer.

Pilbara’s 1-for-7.6 fully underwritten offer will see the miner issue 337 million new shares. The group has proposed price of A$0.36 per new share as part of the equity raise.

What is the Altura Project?

The Altura Project produces hard rock spodumene concentrate next to Pilbara Minerals’ existing Lithium-Tantalum Project. The operation produced 181,263 wet metric tonnes of spodumene concentrate in the year ended 30 June 2020.

Pilbara believes the acquisition will enhance its scale and provide tangible synergies of A$18 million to A$27 million per year. On top of that, management is hoping for greater flexibility, speed to market and increased market relevance.

The Pilbara Minerals share price has rocketed 183.9% in 2020 and boasts a market capitalisation of $1.95 billion.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor Ken Hall 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.

The post Why everyone’s watching the Pilbara Minerals (ASX:PLS) share price appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!