Why Did GRML Stock Crash 45% Today?

• The company intends to raise $20 million to fund its acquisition of the Sarfartoq rare-earth project.
• Sarfartoq mine contains rare-earth minerals which are used for powerful permanent magnets in electric vehicles, wind turbines and defense systems.
• The offering comes after Greenland Mines completed a 1-for-50 reverse stock split earlier this week.

Shares of Greenland Mines (GRML) tanked 45% on Wednesday after the critical-minerals developer priced a heavily discounted public offering just days after completing a reverse stock split.

The company agreed to sell four million shares, for gross proceeds of about $20 million. That implies a price of roughly $5 per share. It is a 48.5% discount over the stock’s closing price of $9.71 on Tuesday.

Greenland Mines plans to use the proceeds to fund its acquisition of the Sarfartoq rare-earth project, as well as working capital and general corporate expenses. The transaction is expected to close around August 27.

The offering comes after Greenland Mines completed a 1-for-50 reverse stock split earlier this week.

Why The Sarfartoq Project Matters

Sarfartoq mine contains neodymium (Nd) and praseodymium (Pr), which are used in powerful permanent magnets for electric vehicles, wind turbines and defense systems.

Greenland Mines estimates the planned project could produce the equivalent of about 34% of annual NdPr oxide supply refined outside China over its proposed nine-year mine life.

The miner recently said the Sarfartoq project could be worth up to $2.05 billion before taxes, including both indicated and inferred resources. Excluding inferred resources, its estimated value is around $1.49 billion.

Retail Remains Bullish

Despite the slump, retail sentiment surrounding GRML on Stocktwits remained ‘bullish’ over the past 24 hours, amid ‘extremely high’ message volumes.

One user said the stock may have bottomed out at around $5.20.

On Tuesday, CFO Jeff LeBlanc bought 14,000 shares at $9.72 each, worth around $136,080. The share acquisition increased his direct ownership to 110,406 shares.

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