Shares of 88 Energy Ltd (LON: 88E) rallied 25% after the mining company announced that it had raised $6.48 million via an exclusive share placement with ELKO International, which bought 360 million new shares at 1.8p apiece.
Investors were pleased to see that ELKO was willing to pay a 62% premium to acquire 88 Energy shares, given that the company’s shares were trading at 1.11p on Friday, yet the new shares were priced at 1.8p.
The miner also reported that the drilling at its Merlin-1 well was proceeding as planned and that the surface well had been drilled up to 1,512ft as planned, with the ultimate goal being to drill up to 6,000 feet.
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Dave Wall, 88 Energy’s Managing Director, commented: “The endorsement of the project by ELKO as we enter the critical phase of the drilling is encouraging and will serve to fund the Company’s share of the recently announced cost overruns.”
88 Energy revealed that logging while drilling and mudlogging will provide initial indications as to the well’s prospectivity in the current drilling phase. The process is expected to take three to five days.
The miner also intends to undertake sophisticated wireline logging operations for five to seven days to determine the well’s prospects.
The latest developments stocked investors’ hopes that the company is one step closer to generating revenues.
88 Energy share price.
88 Energy shares rallied 35.13% higher to trade at 1.50p after rallying from Friday’s closing price of 1.11p.