Why are FireFly Metals shares pulling back from near-record levels today?

Shares in FireFly Metals Ltd (ASX: FFM) took a tumble on Thursday after the company said it had completed a $139 million capital raise to progress its flagship Canadian copper and gold project.

The company's shares hit a record high of $1.98 on Monday before the company's shares went into a trading halt on Tuesday.

The shares have tripled over the past year from levels as low as 66.5 cents, but took a step down on Thursday to be changing hands for $1.79, down 7.9%.

This was after the company announced it had raised $143 million from an institutional capital raise at $1.70 per share.

Existing shareholders in the company will also be able to take up new shares to the value of $5 million at the $1.70 offer price.

Funds to drive growth

FireFly stated in a release to the ASX that the money will be used to expand and upgrade the mineral resource at its Green Bay copper and gold project in Newfoundland, Canada, in preparation for a final investment decision.

FireFly managing director Steve Parsons said the company could now forge ahead with its growth plans.

This highly successful raising means we can embark on a no-holds-barred drilling campaign aimed at creating further shareholder value in a very timely manner. We will increase the drilling fleet to nine rigs as part of an aggressive onslaught targeting extensions to known mineralisation and new regional prospects. We are also progressing towards a final investment decision by derisking the Green Bay copper-gold project by embarking on upscaled mining studies which are expected to be completed in the first half of CY26. "The name of the game at Green Bay is clearly drive value through the drill bit and derisk a large-scale copper-gold project. So that's exactly what we are going to do.

The Green Bay project is made up of multiple assets, with the flagship being the Ming underground mine.

It also includes regional exploration assets, access to a port, and a processing facility.

The Ming mine, according to the FireFly website, was originally mined from 1972 to 1982, before restarting in 2012. It was then mined through to 2023 before being mothballed once again.

As the company explained:

The Ming Mine consists of a fully operational decline accessible to 950m below surface, and an existing 650m deep shaft. This functional infrastructure provides a significant platform for FireFly to rapidly increase the Mineral Resource for minimal capital outlay and set the Company up for future mining operations.

FireFly was valued at $1.32 billion at the close of trade Monday, before the capital raise was announced.

The post Why are FireFly Metals shares pulling back from near-record levels today? appeared first on The Motley Fool Australia.

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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