Why the Magnetite Mines (ASX:MGT) share price is rocketing 10%

The Magnetite Mines Ltd (ASX: MGT) share price is 10% higher in early morning trade. We take a closer look into what the company announced today.
The post Why the Magnetite Mines (ASX:MGT) share price is rocketing 10% appeared first on The Motley Fool Australia. –

Rocket launching into space

The Magnetite Mines Ltd (ASX: MGT) share price is on fire in early morning trade following its capital raising efforts.

At the time of writing, the iron ore miner’s shares are swapping hands for 6.2 cents, up 12.73%.

What’s driving the Magnetite Mines share price higher?

Magnetite Mines shares have started today with a bang after providing its latest release to investors.

In a statement to the ASX, Magnetite Mines advised it has received binding commitments to raise $7 million by a way of placement. The scheme welcomed two new institutions, both with substantial expertise in the resources sector. Furthermore, the company noted other interest coming from sophisticated and institutional investors.

Magnetite Mines will issue roughly 120.8 million ordinary shares at a price of 5.8 cents apiece. Interestingly, the placement is priced at a premium of 2% to the 5-day volume weighted average price (VWAP) recorded on 5 May 2021.

The newly created shares will be issued using the company’s existing placement capacity. Under listing rule 7.1, this allows up to 15% of its shares to be issued without shareholder approval.

Funds raised from the placement are set to be used primarily for advancing studies for the Razorback High Grade Iron Ore Project. In addition, remaining monies will be allocated towards general working capital, and covering the costs of the issue.

Management commentary

Magnetite Mines executive chair, Peter Schubert touched on the company’s capital raise efforts, saying:

We believe that this placement, which is modest in proportion to the Company’s market capitalisation, has considerable longer-term benefits for all shareholders.

It brings sophisticated and institutional investors on to our register, which is a positive development as we move the Razorback iron ore project forward, it underpins the financial position of the business and it increases the funds available for the Company’s exciting development programme.

Most importantly, it provides a firm financial foundation for your Company as we work towards completing the PFS, which is due by the end of the first half of this year.

The Magnetite Mines share price has accelerated in the past 12 months to record an astonishing gain of close to 6,000%.

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 February 15th 2021

More reading

Motley Fool contributor Aaron Teboneras 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 the Magnetite Mines (ASX:MGT) share price is rocketing 10% 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!