The Syrah Resources Ltd (ASX:SYR) share price has fallen 18 cents or 7.3 per cent to $2.28 after the graphite producer successfully raised $94 million via an institutional placement.
The money was raised at a share price of $2.23, a discount of 9.3 per cent to last traded price of $2.46. It was five years ago when Syrah shares last traded below the $2.23 placement price.
Shaun Verner, Syrah Managing Director and CEO, said: “The Company is now in a robust financial position to achieve our key objectives, which include completing the ramp-up of Balama through to positive cash flow, progressing our BAM strategy to the end of 2019, and undertaking further evaluation of the Vanadium Resource at Balama.
The lithium-ion battery sector continues to advance at a rapid rate and creates substantial opportunity for Syrah – with the delivery of our objectives we will be best placed to maximise this opportunity for the benefit of our shareholders.”
Syrah is targeting to be operating cash flow positive from late 2018.
The company is one of the most heavily shorted ASX shares, with investors previously betting on the company needing a heavily dilutive capital raise.
With the capital raise now completed, that leg of the short thesis may have been removed. Syrah shares have fallen around 50 per cent so far in 2018, lining the pockets of the short sellers.
Rob Tucker of Chester High Conviction Fund has been attracted to Syrah as the world’s largest graphite deposit, which it expects will extract high quality graphite flake at (eventually) one of the lowest costs globally.