Core Lithium Ltd (ASX:CXO) has received firm commitments for a placement of shares to institutional and sophisticated investors to raise a total of $5.5 million before costs.
The company has also extended an offer to all eligible shareholders to participate in its growth plans via a $1.5 million share purchase plan (SPP) on the same terms as the placement.
Strong support to date for the capital raising follows the company recently securing its first European offtake MoU for the Finniss Lithium Project in the Northern Territory.
Support for placement
Under the placement, a total of 129,808,860 shares will be issued at 4.25 cents per share to raise $5.5 million, including a commitment by non-executive director Malcolm McComas to subscribe for $61,557 of placement shares subject to shareholder approval.
Of the shares to be issued to placement applicants, 78,993,681 shares will be under the company’s 10% Listing Rule 7.1A placement capacity and a further 49,366,779 shares will be issued under the 15% placement capacity under Listing Rule 7.1.
“Construction ready”
Managing director Stephen Biggins said: “Core is pleased to welcome new shareholders to the business and we strongly appreciate the continued support of our existing shareholders.
“As such, we are inviting existing shareholders to participate in the current capital raising via an SPP on the same terms as the placement.
“Together with the placement, the funds raised from the SPP will enable the company to complete its planned objectives at the Finniss Lithium Project, which we are excited to have construction-ready as COVID-19 restrictions lift in the second half of 2020.”
Biggins said an updated mine plan for Finniss Lithium Project on an expected increase in mineral resources was due in coming weeks while an updated feasibility study was scheduled for completion towards the end of this quarter.
He said: “Core must also continue to invest in engineering studies and environmental monitoring to continue on its pathway towards construction of the first lithium mine and processing facility in the NT.
“This capital raising will also fund drilling on the Finniss project later this year to continue unlocking the value of new resources and reserves, as well as upside potential to expand capacity of the project in the future.”
Non-binding MoU signed
The capital raising follows the recent signing of a non-binding Memorandum of Understanding (MoU) for offtake with Geneva-based Transamine
This relates to the potential supply of 50,000 tonnes per annum of spodumene concentrate to Transamine from the Finniss Lithium Project over five years and is in addition to Core’s existing binding offtake agreement with Yahua for 75,000 tonnes per annum.
The term sheet with Transamine paves the way for a binding offtake agreement, which is anticipated later in 2020 and subject to due diligence and a final investment decision (FID) on the Finniss Project.
Core is confident the impending offtake agreement reflects the company’s commitment to the diversification of the lithium-ion battery supply chain, with the inevitable establishment and growth of downstream lithium processing and battery manufacturing in Europe.
Negotiations are continuing with several parties for the remaining production from the project.