Ridgeline Energy Services Inc (CVE:RLE
) (PINK:RGDEF) stock price rallied after the company completed a bought deal financing and is now able to proceed with the planned key developments.
RLE had the stock price fly up 6% on Wednesday under a trading volume of 2.4 million which was ten times heavier than the average daily turnover of 231 thousand. Technically it looks like the stock would have the required potential to break above the resistance at 70 cents per share. However, the nature of the news that inflicted this increase in price limits the extension of the rally.
On June 13 Ridgeline declared that they have completed the previously announced bough deal financing and have successfully secured $11.5 million. The company sold close to 16.5 million common shares priced at 70 cents each. Underwriters also exercised their over-allotment option to its full potential, which added 2.1 million shares to the overall count.
The new funds will be used to set up facility instalations as well as for acquisitions, general development and working capital needs. Sante Fe Spring water treatment facility in California will be one of the first acquisitions made with the help of these proceeds. Ridgeline will also start building water treatment units under a recently signed contract with Kerr Energy.