European Lithium Ltd (ASX:EUR) (FRA:PF8) (VSE:ELI) (NEX:EUR) has soared on receiving strong support from institutional and high net worth investors for a placement that will boost the company’s cash balance by A$7 million.
Shares were up as much as 86% to A$0.13, a new high of almost two years on volume of more than 63 million as investors respond positively to the placement to sophisticated investors that validates the company’s integrated European lithium supply strategy as well as its new Australian gold project.
These funds will supplement the company’s share purchase plan that closes on January 22 and aims to raise around A$2 million.
“Reflects positive market sentiment”
EUR chairman Tony Sage said, “We are excited by the huge support in the placement shown by institutional and high net worth investors in Australia, Asia and Europe.
“We believe this reflects the positive market sentiment for battery metals.
"After a very challenging year, we now see demand for lithium chemicals to support a very strong EV market which led to the recent lithium price rally.”
Investors will also be issued one option for every two shares issued at an exercise price of A$0.075 and expiring three years from issue.
Proceeds will be used to continue exploration and development on the flagship Wolfsberg Lithium Project in Austria and the new WA tenement considered prospective for conglomerate gold.
Gold prospect in “hot” region
Sage added: "The funds will also be used to explore our recently acquired gold project in the hottest region in Australia with De Gray, Azure, Artemis and Novo all finding success."
Last year EUR secured gold tenement E47/4144 in a ballot and is confident of the prospectivity of the tenement which is in a region of the Pilbara that is attracting plenty of attention.
Through initial desktop analysis of government data and previous open file statutory reports, the company has identified several areas of prospectivity that continue from known gold occurrences in the immediate area.
EUR aims to explore as soon as possible, with the required heritage compliance to allow Native Title Notification to commence to be completed shortly.
The placement is lead managed by Evolution Capital Advisors and Empire Capital Partners.
Placement shares will be issued without shareholder approval relying on the company’s capacity under Listing Rule 7.1 and 7.1A.
The attaching options are subject to shareholder approval, which will be sought as soon as practicable, and the company will seek to have the options quoted.
EUR also expects a strong response to its SPP which offers eligible shareholders with a registered address in Australia or New Zealand with an opportunity to apply for up to $30,000 in new shares at an offer price is A$0.0475 per share.