Solis Minerals (ASX: SLM) shares are up another 35% this morning on the announcement that they have issued more shares to raise $8.15 million. This is something of an oddity. For when there are more shares in issue there is a greater supply - therefore the price usually goes down. Sometimes, only sometimes, we see the opposite as here at Solis. The share price rising on the issuance of more of them.
The background to this is that option exercise that led to Solis taking over the Jaguar lithium prospect in Brazil. As we said a week back, this is all still pretty preliminary: “Solis Minerals (ASX: SLM) is a small junior miner on the Australian stock exchange. Which has just announced that it is to take over the Jaguar Lithium Project in Brazil. This is in an area of known lithium mineralisation, there have been very early indications that there is lithium on the property so why not? Lithium is, after all, quite the fashionable thing to be looking for these days. “Jaguar pegmatite has confirmed Spodumene grades in oxidised pegmatite up to 4.95% Li2O from rock chip samples” Note that that is not saying that the property grades 4.95% Li. That would be astonishing if it did, quite the richest of all deposits. Rather, some chips of rock grade that - the big test then becomes how many such chips per tonne of rock that has to be moved. “
Solis Minerals share price from ASX
The specific issue today is that Solis has now been able to gain funding: “Solis Minerals Limited (ASX: SLM) (“Solis” or the “Company”) is pleased to announce
that it has received firm commitments to raise A$8.155 million at an issue price of A$0.55
through a placement of new fully paid ordinary shares (“New Shares”) to sophisticated and
professional investors as well as North American institutional funds (“Placement”) (before
costs). Solis's largest shareholder, Latin Resources, has committed to participating in the
Placement, increasing their substantial holding to 17.79%, while directors have subscribed for A$200,000 (subject to shareholder approval at the next general meeting).”
The reason that the share price has risen here is that there is no new call upon extant shareholders. This is new - and institutional - investors coming in. The point being not just that there's no call on extant investor wallets, it's that having institutional investors come onto the shareholder register is a validation of the prospects.
Note this doesn't mean proof that this will all succeed. Only that sophisticated investors have looked at this and decided that it's a good bet. The proof, as ever, will be in the exploration results this $8.15 million is going to be spent upon.
