Greenwing's (ASX:GW1) share price explodes on ASX today; here's why

September 25, 2022 10:17 PM PDT | By Ritwika

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Highlights:

Greenwing announced that it has secured a significant funding from NIO Inc for exploration at San Jorge Lithium Project in Argentina.

The funding will be done through the subscription of Greenwing shares at AU$0.55 per share.

Followed by this update, Greenwing's share price skyrocketed on ASX by more than 55% as of 12:30 PM AEST today.

Australian mineral explorer Greenwing Resources Ltd (ASX:GW1) shares were spotted trading 55.102% higher at AU$0.380 per share as of 12:30 PM AEST on ASX today (26 September 2022). The company has announced that it has secured a strategic funding transaction with Blue Northstar Limited's fully owned subsidiary NIO Inc.

The following are the key terms of the funding:

As per Greenwing's update, NIO Inc. has agreed to pay AU$12,000,000 to the company and subscribe to 21,818,182 Greenwing shares at AU$0.55 per share.
After the completion of the placement NIO will hold a shareholding of approximately 12.16% in Greenwing on a fully diluted basis as of the date of issuance. Furthermore, NIO will also earn the right to be a nominee on the board of Greenwing for as long as it continues to hold at least 10% of the shares.
After the implementation of the call option, NIO will get access to take production from the San Jorge Lithium Project.
Greenwing stated that the proposed funding is subjected to the satisfaction of various conditions precedent by 28 February 2023, including Greenwing shareholders' approval.

The utilisation of the raised funds:

Greenwing informed that it will use a minimum of 80% of the raised funds for the development of the San Jorge Lithium Project. The remaining amount of funds raised will be used to support other general expenses of the proposed transaction.

Share price movement of Greenwing:

In the last one year, Greenwing's share price has gained by almost 20% on ASX. On the contrary, Greenwing's YTD-based share price has fallen over 16% on ASX (as of 1:57 PM AEST today).

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