Latin Resources Ltd (ASX:LRS) has raised $35 million and is now well funded to fast track its Bananal Valley drilling program at the Salinas Lithium Project in Brazil.
The company sees the raise, which was anchored by a cornerstone investment of $15 million by Electrification and Decarbonization AIE LP Fund (E&D Fund), a 100%-owned subsidiary of Toronto based Waratah Capital Advisers, as transformational.
Waratah invests in equities of critical battery materials companies and related decarbonisation investment opportunities and is the sponsor and general partner of Lithium Royalty Corp, a leading North American royalty corporation focused on lithium assets, which holds royalties on projects operated by Sigma Lithium, Zijin Mining, Core Lithium, Allkem and Sayona Mining.
Waratah’s investment is a strong vote of confidence in the Salinas Lithium Project and the potential for it to become a significant lithium operation.
The placement was highly successful, attracting interest from institutional and sophisticated investors, including several institutional investors in Australia, North America and Asia, who will receive new ordinary shares at an issue price of $0.16 to raise the $35 million.
Funds to fast-track Salinas
The funds from the placement will be used for multiple purposes, all designed to expedite Latin’s lithium business in Brazil.
Funds will be used for:
- An aggressive resource definition program for the Bananal Valley prospect within the Salinas Lithium Project, Brazil;
- Exploration drilling at the Monte Alto and Salinas South lithium prospects in Brazil;
- A Pre-Feasibility Study, a Direct Shipping Ore Study and metallurgical test work in respect of the Cloud Nine Halloysite-Kaolin Deposit in Western Australia, as well as regional exploration at the broader Noombenberry Project area;
- Initial exploration drilling at the MT-03 Copper Project in Peru; and
- Working capital.
Latin wants to secure a further two rigs, to take the total fleet to four rigs in Brazil. This will enable the company to rapidly establish project scale through escalating the drilling campaign with a focus on drilling at least 25,000 metres at the Bananal Valley lithium discovery.
The goal is a maiden JORC mineral resource estimate.
Further to this, LRS is out to complete 5,000 metres of drilling at each of the Monte Alto and Salina South prospects.
It hasn’t lost focus on its WA project either. Money will go towards quickly advancing the Cloud Nine Halloysite-Kaolin Deposit, with key feasibility studies underway targeting the delivery of an upgrade of the JORC mineral resource, and in a parallel undertaking a fast-start direct shipping ore (DSO) study.
Significant potential
Waratah’s president and managing director Ernie Ortiz is pleased to have made such a substantial contribution to the raise.
“We are very pleased to have the opportunity to invest in Latin Resources. The Salinas Lithium Project shows potential to become a significant lithium operation. We are excited about our partnership with Latin to advance its Salinas Lithium Project,” Ortiz said.
Latin Resources’ managing director Chris Gale said: “Our results at Salinas have been exceptional, revealing we have some very high-grade lithium spodumene mineralisation. We consider that winning the support of a technical-focused group, like Waratah’s E&D fund, which is very well-versed on the lithium sector, is a big tick of approval for what we are doing and where we are headed with our Salinas Lithium Project.
“What’s really exciting is the roadmap ahead for LRS shareholders. We are relatively early in the discovery phase of our Salinas Lithium Project, and we have much work ahead of us, however, the level of attention we are receiving from industry players suggests we are not alone in thinking that Latin has a chance to develop a highly valuable lithium project in Brazil.”
Placement details
The placement was conducted at $0.16 per share, representing a 13.5% discount to Latin’s last close price prior to the transaction, and an 8.3% premium to the company’s 10-day volume-weighted average price.
Every two new placement shares will have one unlisted option attached, with an exercise price of $0.22 and a five-year expiry.