Latin Resources Ltd (ASX:LRS) has signed an option funding agreement worth $2.5 million in option exercise proceeds to accelerate activity on its lithium projects in Brazil and fund general corporate and working capital needs.
The option funding agreement with Lind Asset Management XII, LLC – an entity managed by New York-based The Lind Partners, LLC – was signed using ‘in the money’ LRSOC options.
If all LRSOC options are exercised, they would generate up to $5.1 million in option exercise proceeds for the company.
Latin Resources will repay the funding progressively with proceeds from LRSOC options as they are exercised, or earlier, at Latin’s discretion.
Providing capital without dilution
“This innovative funding facility provided by our funding partner, Lind, provides the company necessary working capital to continue to drill the newly discovered spodumene pegmatites in our Brazilian portfolio without the need for an equity placement, reducing dilution for existing shareholders,” Latin Resources managing director Chris Gale said.
“We expect we can add a lot of value, very quickly in Brazil with these funds.
“The company has good reason to expect over $5 million cash will be received from the exercise of its LRSOC options, and this funding, backed by the option money, now fast tracks our drilling program.
“This funding provides a cost-effective source of capital for the company.”
Latin Resources has 428,962,607 LRSOC $0.012 options distributed and anticipates that a significant number will be exercised prior to their expiry on December 31, 2022.
If so, this will generate approximately $5.1 million in cash for the company, enabling LRS to comfortably repay the Lind facility and fund further activities.
The initial investment will be used to further drilling at Latin Resource’s Salinas Lithium Project in Brazil where it was recently announced that the current drilling program has discovered several spodumene pegmatites.
Read: Latin Resources hits multiple spodumene pegmatites in first drill hole at Salinas
LRS is now moving to extend the ongoing 2,000-metre drilling program to 5,000 metres in an attempt to progress the Salinas project toward a JORC mineral resource estimate.
“Lind is extremely pleased to be investing in Latin Resources for a third time,” The Lind Partners managing director Phillip Valliere said.
“They have an exciting portfolio of lithium projects targeting the battery metals sector, which we hope will deliver growth and shareholder value for all LRS shareholders.”
About Latin Resources
Latin Resources is an Australian-based mineral exploration company, with projects in Australia and South America, that is developing mineral projects in commodities that progress global efforts towards net-zero emissions.
The Australian projects include the Cloud Nine Halloysite-Kaolin Deposit. Cloud Nine Halloysite is being tested by CRC CARE with the aim of identifying and refining halloysite usage in emissions reduction, specifically for the reduction in methane emissions from cattle.
In Latin America the company’s focus is on its two lithium projects, one in the state of Minas Gerais, Brazil and the other, the Catamarca Lithium Project in Argentina.