Kali Metals Ltd (ASX:KM1) shares surged 76% higher intra-day on its first day of trading to 44 cents, underscoring investor confidence in lithium and Australia-based lithium explorers despite the dip in spodumene concentrate prices.
This follows Kali’s massively oversubscribed initial public offering that opened and closed in less than 20 minutes, raising $15 million.
Kali holds vast tracts of ground in a lithium hotspot around Kalgoorlie and Norseman, where Mineral Resources Ltd (ASX:MIN) owns and operates the Mt Marion and Bald Hill mines.
It also has exploration ground near lithium mines and projects in the Pilbara, including a joint venture with SQM (NYSE:SQM).
Kali’s bookbuild was marked by significant interest from notable figures in the West Australian lithium sector and various institutional investors.
Mineral Resources managing director Chris Ellison has a major shareholding, with a 4.86% stake in Kali through his private company Wabelo.
Ellison is the third-biggest shareholder behind Kalamazoo Resources Ltd (ASX:KZR) (22.1%) and Karora Resources Inc. (TSX:KRR) (20.2%), which combined some of their assets to spin out Kali.
Other big names on the Kali list of top 20 shareholders include another West Australian billionaire, former MinRes director Tim Roberts, Navitas education company co-founder Rod Jones, Mutual Trust and the family office for the Myer and Baillieu families.
Read: Kali Metals makes ASX debut today after IPO closes heavily subscribed
Most of that $15 million raised by Kali is earmarked for an area known as Higginsville in the Eastern Yilgarn region of Western Australia, where Kali has about 1500 square kilometres of exploration ground surrounded by the MinRes-operated Mt Marion and Bald Hill operations and projects owned by MinRes-backed lithium juniors.
Kali is also advancing the DOM’s Hill Project, Marble Bar Project and Pear Creek Project in the Pilbara region of Western Australia.
Under a joint venture deal, SQM (NYSE:SQM) can gain a 70% stake in two (DOM’s Hill and Marble Bar) of Kali’s three Pilbara projects by spending $12 million over four years to support exploration work.
Kali managing director Graeme Sloan said: “We are delighted that the IPO of Kali has received such strong support and investment from a wide range of high calibre investors who as shareholders will support Kali on the next stage of its journey.
“Some of these same investors have also indicated their interest in potentially exploring strategic opportunities with Kali as we move past the IPO process.
“With a pipeline of advanced and green fields exploration targets, the recent appointment of Stuart Peterson as technical advisor – Geology will further strengthen what is already a formidable exploration team.
“Stuart’s experience in lithium discovery and development, as evident from his previous strategic role at Global Lithium in the discovery of the Manna deposit, will certainly play a crucial role in prioritising and allocating funds towards the multiple exploration targets already identified at the Higginsville Lithium Project.
“This is an exciting time for Kali and our new IPO shareholders and on behalf of the Kali Board of Directors I would like to thank all those involved with such a successful IPO.”