Critical Metals announces $22.5m financing, shares plummet

Critical Metals Corp (Nasdaq: CRML) is raising $22.5 million through a private investment in public equity (PIPE) financing that is expected to close later this week. However, its shares plunged to an all-time low on the news.Under the PIPE financing, Critical Metals will issue 4.5 million shares with an offer of $5.00 per share, which is a significant discount (over 43%) to its opening price of $8.90 on Thursday. The company will also issue the same number of warrants with a strike price of $7.00, which could lead to dilution of up to 19% if exercised in full.By 11:00 a.m. ET, Critical Metals’ stock fell 34.4% to $3.72 apiece, after hitting a new low of $3.40 earlier in the trading session. The share drop takes its market capitalization to $529.3 million.Critical Metals was created in March 2024 through a merger between Australia’s European Lithium (ASX: EUR) and US-based Sizzle Acquisition. The former currently owns 83% of the company.The financing proceeds will be used on Critical Metals’ two pre-production mining assets based in Europe: the Tanbreez rare earths project in Greenland and the Wolfsberg lithium project in Austria.Tanbreez is currently the world’s largest rare earth deposit by resource count, with 28.2 million tonnes of total rare earth oxides (TREOs). Rare earth elements are essential components for permanent magnets in wind turbines and EV motors, making them crucial to the energy transition. China currently dominates the rare earth supply chain, accounting for 60% of its mining and 90% of the ore processing.Critical Metals acquired a controlling stake in the project last summer, hailing it as a potential “game-changing” mine project for North America’s rare earth supply chain. Recently, it made a discovery of gallium, another critical mineral, from its drilling at Tanbreez to expand the resource.At Wolfsberg, its flagship asset, the company is looking to build the EU’s first battery-grade lithium mine, targeting first production in 2026/27. The project has the backing of German carmaker BMW, which entered into a long-term offtake agreement with Critical Metals’ parent company European Lithium in December 2022.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com