Core Lithium Ltd (ASX:CXO) has raised A$91 million in an institutional placement of 293 million new fully paid shares to domestic and global institutional investors, with demand exceeding the new shares to be issued.
The A$91 million placement, together with the Ganfeng equity investment of A$34 million at A$0.338 per share and non-underwritten share purchase plan to existing eligible shareholders to raise up to A$15 million, provide certainty of funding to meet the timeline of construction at the Finniss Lithium Project in the second half of 2021.
Ganfeng Lithium, which has a market cap of around US$40 billion, has also promised to offtake 75,000 tonnes of spodumene concentrate every year from Core’s flagship lithium project in the Northern Territory over a four-year period.
Funds raised through the equity raising will be used for:
- Upfront capital costs at Finniss, including plant construction costs, Grants open pit pre-strip costs and other mine establishment costs;
- Environmental bond payments to the NT Government;
- Drilling to accelerate reserve and resource growth; and
- Working capital.
The Ganfeng agreement means Core has commitments to offtake around 80% of Finniss’ Stage 1 production over the first four years of the asset’s mine life, with a multi-stage equity raise announced to support the company’s transition to Australia’s next lithium producer.
Fully funded to complete Finniss stage-1 development
Core managing director Stephen Biggins said he was pleased with the overwhelming support received in what is a “transformational” moment for the company.
“We thank our existing shareholders for their ongoing support and welcome a number of new, high-quality institutional investors to our register, supporting our journey towards being Australia’s next lithium producer.
“Together with the Ganfeng equity investment and the share purchase plan, we are now fully funded to complete Stage 1 development of Finniss and have the financial flexibility to assess future growth initiatives.
“With the support of our high-quality shareholder base, we look forward to executing on our plan to commence anticipated first production in late 2022.”
Settlement of the new shares issued under the placement is expected to occur on Monday, August 16 with allotment scheduled for Tuesday, August 17.
Share purchase plan
Core’s existing eligible shareholders, being those shareholders that are residents in Australia or New Zealand that held Core shares as at 7:00pm (AEST) on Friday, August 6, will be invited to participate in the SPP at the same issue price as the placement (A$0.310 per share).
The SPP will provide eligible shareholders the opportunity to increase their holding by up to A$30,000 without incurring any brokerage or transaction costs and is targeted to raise up to A$15 million and is not underwritten.
Further information regarding the SPP (including terms and conditions of the SPP) will be provided to eligible shareholders in the SPP offer booklet, which will be made available to eligible shareholders shortly.
Eligible shareholders wishing to participate in the SPP will need to apply in accordance with the instructions in the SPP offer booklet.