Genesis Resources’ shares are on the move today. Here’s the details.
The post Why the Genesis Minerals (ASX:GMD) share price is rocketing 160% today appeared first on The Motley Fool Australia. –
The Genesis Minerals Ltd (ASX: GMD) share price has soared into the green during early trade on Wednesday.
Genesis shares are now changing hands at 19 cents apiece, a 160% gain from the market open.
Let’s take a look.
What’s fuelling the Genesis Minerals share price today?
Genesis shares are on the move after the company made a key announcement regarding a capital raise and board restructuring.
The company advised its planned “strategic funding and board restructure”, which is “aimed at delivering extensive financial and management strength” to Genesis.
Overall, the moves are a part of the plan to “grow Genesis into a mid-tier Australian gold company”.
Under the above proposal, Genesis will seek to raise $16 million via a placement at 6 cents per share.
This signifies a 65% discount to the current Genesis Minerals share price. However, just prior to the announcement, it represented just an 18% discount.
The proposal is “led” by “highly regarded gold mining executive”, Raleigh Finlayson, who hails from previous managing director positions at Saracen Mineral Holdings (ASX: SAR) and Northern Star Resources Ltd (ASX: NST), as per the release.
Finlayson will be “appointed managing director of Genesis by no later than 31 March 2022”, and will have performance option rights attached to his tenure.
In addition, former Fortescue Metals Group Limited (ASX: FMG) managing director and CEO Neville Power will be invited to join the board, alongside “highly experienced corporate lawyer” Michael Bowen.
The moves appear to be a big step in credibility for the company, which now has an “enviable team” filling its board, according to the statement.
Genesis’ largest shareholder, Alkane, has advised the company that it “strongly supports the strategic investment and board changes”.
Investors appear to strongly support the changes too and are driving the Genesis Minerals share price into unseen heights during early trade on Wednesday.
What did management say?
Commenting on the announcement, Genesis chairperson Tommy McKeith said:
Raleigh is a highly successful gold miner with an exceptional track record of creating value for
shareholders, growing Saracen from a junior explorer and developer into a $6 billion company at the
time of its merger with Northern Star.
Speaking on the additional appointments to the board, McKeith added:
With Raleigh working alongside Neville, whose vast experience and achievements are widely acknowledged across the Australian business spectrum, and Michael, who is one of Perth’s most highly regarded corporate lawyers, Genesis will have an enviable team in the Boardroom.
Genesis Resources share price snapshot
The Genesis Resources share price wasn’t producing anything exciting before today’s announcement.
It closed yesterday’s session at 7.3 cents, down from around 8 cents a year ago.
It is now up 156% this year to date, and over 130% in the last 12 months – a huge plus for investors who bought Genesis shares back then.
Should you invest $1,000 in Genesis Resources right now?
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The Vanguard MSCI Index International Shares ETF (ASX:VGS) has more than doubled the ASX 200’s returns in 2021
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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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.