Woomera Mining (ASX: WML) shares are up 42% today. The rise in WML shares is because they’ve announced that they closed their fund raise and did, indeed, raise the funds they wanted. This means that they are no fully funded through the drilling phase of their lithium exploration plans. This does not mean that they’re going to find lithium in any economic quantity - this is why the necessity of going drilling, to find out. So, this valuation is that they’ve crossed that first hurdle, of having the money to find out. But, of course, we’ve still got that considerable uncertainty of what they will find.
The announcement: “Woomera Mining Limited (ASX: WML) (‘Woomera’ or ‘the Company’) is pleased to announce that it has today issued 237,500,004 ordinary shares to professional and sophisticated investors pursuant to the share placement announced on 1 November 2023. The Company issued a total of 237,500,004 ordinary shares at $0.009 per share to raise $2.1m (‘Shares’), with 142,058,029 shares issued pursuant to the Company’s 15% placement capacity pursuant to ASX Listing Rule 7.1, and 95,441,975 shares pursuant to Listing Rule 7.1A.” This follows the announcement from a week ago: “Binding commitments received from sophisticated investors and Woomera Directors for a Share Placement to raise up to $2.3 million. Proceeds will primarily fund fully approved and permitted RC drilling and geochemical sampling of the Company’s Ravensthorpe Lithium Projects (Mt Cattlin and Mt Short). Drilling at Ravensthorpe projects expected to commence in late November 2023”
And that’s what they’re going to do with the money they’ve just been able to raise.
Woomera Mining share price from Google Finance
At this stage there’s no proof that there’s anything economic there. There are some “lithium anomalies” which need to be explored. Some identified pegmatites which may or may not contain spodumene, that spod itself perhaps and maybe not containing lithium. This is all very much on hope value.
On the other hand we do know that there’s lithium in the area. Geology also tends to cluster, what’s created this piece of land here is often enough what created the bit next door. But that is what is being worked upon. The wider area is known to have lithium. So, maybe this patch of it does too? On that basis let’s go spend a couple of million $ to find out. If there is economic lithium there then Woomera is worth more than today - if not then not so. Which is what the bet is at this stage. As with Metal Hawk, it’s all in that hope value.