This Small-Cap Miner Tripled Pre-Market — Here's Why

• Nicola Mining stated that it intends to use the net proceeds from the offering toward capital expenditures, such as mill expansion and the purchase of property, plant, and equipment.
• The company also stated that it will use the proceeds to meet its working capital requirements, as well as for other general and corporate purposes.
• Nicola Mining added that the underwriters have an option to purchase an additional 139,534 American Depository Shares.

Shares of Nicola Mining Inc. (NICM) soared more than 170% before the bell on Wednesday, making the stock the top pre-market gainers.

This comes after the company announced on Tuesday during after-market hours that it has raised $6 million via an underwritten public offering of its American Depository Shares (ADS) and warrants.

Nicola Mining was among the top trending tickers on Stocktwits at the time of writing.

Why Did Nicola Mining Raise Funds?

Nicola Mining, a Vancouver, Canada-based company, stated that it intends to use the net proceeds from the offering toward capital expenditure, such as mill expansion and purchasing property, plant, and equipment.

The company also stated that it will use the proceeds to meet its working capital requirements, apart from other general and corporate purposes.

Nicola Mining added that the underwriters have an option to purchase an additional 139,534 ADSs. The current offering was priced at $6.45 per ADS, which is at a discount of nearly 8% compared to Tuesday’s closing price of NICM.

If Nicola Mining’s shares maintain their gains through the opening session, the company’s market valuation would soar from about $131 million to more than $354 million.

The company also announced the listing of its ADSs on the Nasdaq on Monday.

Nicola Mining operates a mill and tailing facility in British Columbia. It also has copper, gold, and silver mining projects either in development phase or plans to operationalize them.

How Did Retail Traders React?

Retail sentiment around Nicola Mining trended in the ‘neutral’ territory with message volumes hovering at ‘extremely high’ levels.

One bullish user stated that Nicola Mining has the potential to offer deep value and also be a high-growth investment.

NICM stock is down 1% year-to-date.

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