European Lithium Ltd (ASX:EUR) has raised $5 million to assist in funding the Wolfsberg Lithium Project in Austria.
The $4 million placement was heavily oversubscribed and the additional $1 million oversubscription facility was accepted by the company.
The placement has been taken up by sophisticated and professional investors.
READ: European Lithium raises capital at premium to fund resource expansion activities
Significantly, the placement’s price of $0.225 represents a 40% premium to the 15-day volume weighted average price (VWAP).
The company received the majority of placement funds by Thursday afternoon with the remainder due in by Friday 8 December.
Takes up shows “great confidence” in project
Tony Sage, chairman, said “Approximately 95% of the placement has been taken up by European based shareholders which shows great confidence in the Wolfsberg project.
“The funds will be used to help the company better understand the size and value of the deposit in zone two which drilling earlier this year showed to be a very prospective area.”
European Lithium will also issue one free attaching unquoted option for every four shares applied for under the placement.
There will also be 14.4 million options to facilitators of the placement which are exercisable at $0.25 on or before 31 May 2019.
The shares and options are expected to be issued on Monday 11 December 2017.
Definitive feasibility study work at Wolfsberg
The work to be funded at Wolfsberg forms part of a definitive feasibility study (DFS) drilling program.
Management expects to finalise a pre-feasibility study (PFS) by the first quarter of 2018 and have the DFS completed by the third quarter.
News flow surrounding the release of the PFS and DFS are potential share price catalysts in 2018.