Leigh Creek Energy Ltd (ASX:LCK) (FRA:LVT) has raised $18 million capital to progress stage 1 of the Leigh Creek Energy Project in South Australia to the production of commercial syngas and power generation.
The placement, which will be issued at $0.18 per share with a one-for-one attaching 28 cents option expiring in three years, subject to shareholder approval, was supported by several Australian and global institutions.
“Move forward with Stage 1 of the flagship project”
LCK managing director Phil Staveley said: “This $18 million capital injection will enable LCK to continue to move forward with Stage 1 of our flagship project with added confidence and puts us one step closer to our goal of building a plant at Leigh Creek, which can deliver urea into the Australian and overseas markets.
“The opportunity presented by this capital raise means we can immediately focus all our resources and attention on driving forward the commercial stages of the project.
“In the coming weeks, we expect to execute the final agreement for engineering, procurement, construction and completion of the urea plan with Korean giant, DL E&C and offer further equity to our existing, loyal shareholders.”
Terms of the placement
The placement price represents a 20% discount to the last trading price of $0.225 before the placement and a 21.6% discount to the 5-day volume-weighted average price (VWAP).
Evolution Capital Advisors Pty Ltd acted as lead manager to the placement.
Use of fund
The company plans to spend on various activities.
Only fully integrated urea production facility in Australia
LCEP is developing low-cost nitrogen-based fertiliser for local and export agriculture markets.
About 550 kilometres north of Adelaide, the LCEP will initially produce 1 million tons per annum (Mtpa), with the potential to increase to 2Mtpa, of urea using LCK’s 1,153PJ 2P gas reserves.
The $2.6 billion LCEP will be one of the biggest infrastructure projects of its type in Australia, providing long term economic development and employment opportunities for the communities of the Upper Spencer Gulf region, northern Flinders Ranges and South Australia.
The LCEP will be the only fully integrated urea production facility in Australia, with all inputs for low carbon urea production on-site.
It has produced syngas within all approved environmental parameters set by the regulator and will be carbon neutral by 2030.