Pilbara Minerals Ltd (ASX:PLS) has been rushed by investors keen to get aboard its Pilgangoora Lithium-Tantalum project, which is the second largest Spodumene project in the world.
The company will raise $100 million through a share placement and a share purchase plan at $0.38 each but is understood to have turned back upwards of another $100 million from investors.
The steep discount to market price was a considerable reason for the interest as is the project quality and projected steep demand for lithium-ion batteries.
A total of $85 million was raised by placing 223.6 million shares at an issue price of $0.38 each to institutions and sophisticated investors in Australia and abroad.
Pilbara is also offering $15,000 worth of shares to every shareholder at $0.38 per share, under a share purchase plan to raise up to a maximum amount of $15 million.
The proceeds of the placement and SPP, together with Pilbara’s existing cash reserves of $12 million, will boost the company’s cash to approximately $106 million after capital raising costs.
Blue Ocean Equities is acting as lead manager to the raising with support from Perth broker Hartleys.
The share price of Pilbara has risen from a barely there $0.03 to $0.50 in one year.
The new funds will enable Pilbara to rapidly advance its Pilgangoora Lithium-Tantalum Project in Western Australia into production, and take advantage of strong market conditions and rapidly increasing demand for lithium.
With the Tesla Model 3, powered by lithium ion battery receiving 276,000 bookings within 3 days of launch, this provides an example of the future demand for lithium from the automobile sector which is expected to grow rapidly.
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