PERTH (miningweekly.com) – Metals developer Pilbara Minerals would raise A$100-million through a share placement and share purchase plan to accelerate the development of its Pilgangoora lithium/tantalum project, in Western Australia.
The company on Thursday said that it would place about 223.6-million shares, at a price of 38c each, to qualified institutional and sophisticated investors to raise an initial A$85-million.
The share placement would be undertaken in two tranches, with the first tranche consisting of 142-million shares and falling within the company’s 15% placement capacity.
The second tranche of 81.68-million shares would require shareholder approval.
Meanwhile, shareholders in Pilbara would be allowed to subscribe for up to A$15 000 worth of additional shares, which would also be priced at 38c each, to raise a further A$15-million.
The issue price represented a discount of 9.3% to the company’s ten-day volume weighted average price, prior to a trading halt on April 5.
Pilbara CEO Ken Brinsden told shareholders that the exceptional shareholder response to the capital raising was a reflection of both the scale and quality of the Pilgangoora project, which was now widely seen as one of the world’s premium lithium development opportunities.
“This is a tremendous outcome for Pilbara, which clearly demonstrates the strong appetite amongst global investors to gain exposure to the rapidly emerging opportunity in lithium, and to do so by investing in tier one assets like Pilgangoora.”
A March prefeasibility study estimated that the project could support a standalone two-million-tonne-a-year operation, delivering 330 000 t/y of 6% spodumene concentrate and 274 000 lb/y of tantalite.
Based on the current mine reserves of 29.5-million tonnes, the project would have a mine life of 15 years, with further growth expected from the 15 000 m drilling campaign currently under way as part of definitive feasibility study work.
The proceeds of the share placement and SPP would be used to accelerate drilling to increase the resource and ore reserve at the Pilgangoora project, as well as to complete work on the definitive feasibility study.
Pilbara would also use the funds to progress discussions with potential customers to convert memorandums of understanding already in place into binding offtake agreements, and to place orders for long-lead items and progress early works.
Pilbara was targeting construction at Pilgangoora for the first quarter of 2017.