Lithium Universe Ltd (ASX:LU7, OTC:LUVSF) has settled the first tranche of a share placement plan, issuing just under 162 million shares at A$0.012 each to raise $1,941,500 in funding.
LU7 will use the additional funding to advance definitive feasibility studies (DFS) for the proposed Bécancour lithium refinery, as well as to cover land option costs.
Investors who subscribed under this first tranche of the placement are also entitled to one new option for every share subscribed to, with an expiry date of January 12, 2026, and an exercise price of $0.03.
Additional placement subject to approval
Lithium Universe intends to offer a second tranche of placement shares to sophisticated and professional investors, subject to shareholder approval.
The second tranche would also include a pro-rata one-for-10 non-renounceable entitlement offer, as well of options on the same terms as the second tranche.
LU7 proposes to offer just over 16.6 million shares, to be voted on at the upcoming general meeting on December 9, 2024.
Additionally, the company’s entitlement offer will open on Monday, November 11, 2024.
Read: Lithium Universe raising up to A$3.16 million to fund Bécancour Lithium Refinery DFS
LU7 intends to close the ‘Lithium Conversion Gap’ in North America by developing a mine-to-battery-grade lithium carbonate strategy in Québec, Canada.
The company’s business model focuses on converting spodumene supplies under "take or pay" agreements with OEMs.
These agreements include protective pricing mechanisms, such as floor and ceiling prices, to ensure stable margins and mitigate market volatility.
LU7 believes this approach guarantees its refinery's payback while providing OEMs with a reliable and sustainable supply of lithium chemicals.