Lithium Australia Ltd (ASX:LIT, OTC:LMMFF) has received firm commitments to raise almost A$12.1 million as part of a placement to existing shareholders, new high-net-worth sophisticated investors and institutional investors at an issue price of A$0.065 per share.
The two-tranche placement also includes participation by a director of the company in tranche two, who has subscribed for about 1.5 million shares valued at A$100,000.
Funds raised from the placement will be used towards the commercialisation of its wholly-owned subsidiaries, battery recycler Envirostream and advanced cathode powder producer VSPC, as well as for general working capital.
“Strong position”
LIT chairman George Bauk said: “We are very pleased with the strong support from existing and new shareholders for the capital raising.
“This funding puts us in a strong position to continue to progress our core opportunities of battery recycling and advanced cathode materials.
“This is an exciting time for the company, and we look forward to delivering on our strategy.”
Placement summary
The placement is proposed to be completed in two tranches:
- Tranche 1 will consist of a total of 184,233,885 shares to raise A$11.95 million. The tranche 1 shares are expected to be issued on or around September 9, 2022, by utilising the company’s existing placement capacity.
- Tranche 2 will consist of a total of 1,538,462 shares to raise A$100,000 (being the director placement shares), all placement options, and the broker options, which will be issued subject to receipt of shareholder approval, which will be sought as soon as possible.
This placement was managed by Perth-based CPS Capital Group Pty Ltd (CPS).
The issue price of the placement shares represents a discount of 22% to the last close price of A$0.083 and a discount of 21% to the 5-day and 10-day VWAP of A$0.082.
Use of funds
At Envirostream, funds will be used to drive the increase in safe recycling of spent battery volumes at its operational facilities in Victoria.
At VSPC, funds will be used to complete engineering studies for the expansion of current facilities and to advance offtake and raw material relationships for the LFP supply chain
With this successful fundraising, LIT will have sufficient cash reserves to meet the requirements of the use of funds and therefore the directors do not see a reason to draw on the At-the-Market Subscription Agreement (ATM) with Acuity Capital for the near future.