Shares in Great Western Mining Corporation PLC (AIM:GWMO) dropped 8.4% to 1.4p after the company announced a £3.25 million placing to fund exploration at its tungsten project in Nevada.
The funds will be used to fast-track drilling at the company’s Defender-Pine Crow project, where recent sampling confirmed high-grade tungsten mineralisation.
The placing was priced at 1.4p per share, just over a tenth of a penny from the last 1.53p close, though the shares are up from below 1p in August.
Investors will also receive a warrant for each share, exercisable at 2p over the next three years.
Great Western said the proceeds would support geophysics, drilling and an initial resource estimate. The company has submitted a notice of intent to drill to US regulators, with drilling expected to begin in the current field season.
Chairman Brian Hall said: "With a strong need for domestic tungsten production in the US, we believe the strategic relevance of this project will be increasingly recognised.
"We have watched with great interest the success of the Pilot Mountain project operated by our neighbour Guardian Metal Resources which is only 30 miles away from Defender and in a similar geological setting. This funding places the company in a strong position to deliver meaningful progress during the upcoming drilling season, while continuing to advance our wider Nevada portfolio."
Tungsten prices have surged in recent months amid growing expectations of increased defence demand, with US policymakers keen to secure domestic supplies of critical minerals.