Here’s why Sandfire stock price is soaring on Monday
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The Sandfire Resources Ltd. (ASX: SFR) the share price starts the week in the red.
In afternoon trading, shares of the copper miner are down 0.5% at $4.76.
Why is the Sandfire stock price falling?
The weakness in Sandfire stock price today is due to the company completing its institutional placement.
According to the release, the company has successfully closed the institutional component of its accelerated 1 for 8.8 prorated non-waiver right offering to raise approximately $147 million.
These funds were raised at an offering price of $4.30 per share, representing a 10.2% discount to the last closing price of $4.79. In light of this discount, the current modest decline in Sandfire’s share price is a pretty good result for shareholders.
An additional $53 million will now be raised through a fully subscribed retail rights offering.
Why is Sandfire raising funds?
Management notes that the fundraising strengthens Sandfire’s balance sheet, providing increased financial flexibility. It also ensures that the company remains well funded to advance its ongoing strategic growth and exploration initiatives across its portfolio.
In addition, proceeds will be used to repay the ANZ corporate credit facility and fund increased working capital as Motheo transitions from construction to first production and ramp-up. This is expected from the start of the fourth quarter of fiscal 2023.
The Sandfire Chair, John Richards, commented:
We are very pleased with the level of support shown by our shareholders for the institutional rights offering. This increase increases our financial flexibility, placing the Company in a strong financial position to continue executing our strategy to deliver growing and sustainable copper production from our portfolio of premier international projects.