Australian Vanadium Ltd (ASX:AVL) has received firm commitments to raise $8.7 million via a placement of shares at $0.025 per share.
Notably, the placement was well oversubscribed attracting interest from both existing shareholders and new investors, including new institutional cornerstone investors.
The offer price of $0.025 represented an 11% discount to the 15-day volume-weighted average (VWAP) price of $0.028 and a 13.9% discount to the last closing price of $0.029.
Moving toward final financial decision
AVL managing director Vincent Algar said: “The strong demand from investors for AVL supports the view that the Company is now seen as the next global producer of vanadium based in Australia.
“The funds will allow us to add further value to the Company as we complete our BFS and move the Company towards final financial decision, approval and construction.
“The year ahead looks positive for vanadium in both steel and battery sectors.
“The funds raised through the Placement puts the Company in a strong financial position to deliver and realise further value for all stakeholders.”
Strong investor interest
The shares were placed to institutional and sophisticated investors that qualify under section 708 of the Corporations Act.
Promisingly, the offer was strongly oversubscribed, with over $14 million of bids received.
The capital raising was managed by 180 Markets, who will be paid a standard 6% fee on all funds introduced and will receive 25 million options subject to shareholder approval.
Forward plan
Funds raised from the placement will be applied towards:
- Completion and delivery of the bankable feasibility study for the Australian Vanadium Project;
- Finalise design and build Australia’s first vanadium redox flow battery (VRFB) electrolyte supply plant, with co-funding from the Australian government under the resources technology and critical minerals processing national manufacturing priority grant;
- Design and manufacture of locally made residential and VRFB based stand-alone power system (SPS);
- Finalise offtake agreements for vanadium and FeTi co-products with steelmakers and battery manufacturers;
- Prepare for the Australian Vanadium Project front end engineering design (FEED) and project execution;
- Coates Ni-Cu-Pt project airborne electromagnetics (geophysics) results and Pt-Ni-Cu drilling; and
- Other value addition projects and working capital.
- Ephrems Joseph