The Bluejay Mining PLC (LON: JAY) share price fell 22.9% after announcing its decision to cancel the spinoff of Disko Exploration Ltd., its battery and critical metals exploration subsidiary, saying that after a thorough review, the spinoff was no longer an appropriate strategy to maximise shareholder value.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
The mining and exploration company further announced significant changes to its operating strategy regarding all its projects in Greenland and Finland. The most drastic changes have been made to its Dundas Ilmenite Project in Greenland, whose current pre-feasibility study (PFS) has been redone, construction plans changed, and cost estimates reduced.
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Bluejay Mining also issued relevant updates regarding all its projects with a renewed focus on its 100% owned projects, such as the Kangerluarsuk Lead-Zinc-Silver ± Copper Project. The company raised $6 million in conditional funding from Towards Net Zero, LLC, an institutional investor from the US, to fund its Kangerluarsuk project.
The markets reacted negatively to today’s strategic review issued by Bluejay’s Executive Chairman, Mr Robert Edwards, despite the cost savings announced and the positive nature of many of the changes announced. Investors were unduly focused on the cancellation of the proposed demerger of Disko Exploration Ltd.
However, I hope that over time, the Chairman’s decision to reverse the proposed demerger will be seen positively by shareholders leading to a rally in Bluejay Mining’s share price. Meanwhile, I have to point out that the share subscription by the US investor was priced at 10p per share.
The institutional investor paid a significant premium to acquire a stake in Bluejay Mining while exclusively funding the Kangerluarsuk Lead-Zinc-Silver ± Copper Project. The news should have elicited a better reaction from investors, but it didn’t.
Robert Edwards, Bluejay Mining’s Chairman, said:
“When I joined the Bluejay team as Executive Chairman last October, it was my firm view that the entire portfolio reflected the opportunity for shareholders, not just a portion. Following my strategic review, this is still the case. I believe that shareholders have been somewhat frustrated with the historic focus on individual projects… It is the aim of the Bluejay team to rebalance the risk and reward equation for shareholders and to deliver.”
*This is not investment advice.
The Bluejay Mining (JAY) share price fell 22.92% to trade at 3.70p, from Monday’s closing price of 4.80p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
