The Bald Hill lithium and tantalum mine in Western Australia.
Australian lithium producer Tawana Resources gained on the ASX on Thursday, after announcing a A$40-million funding package from Tribeca Investment partners and others to advance its Bald Hill project and to facilitate the listing of Alliance Mineral Assets.
The company secured a A$20-million debt facility and a A$20-million standby line of credit conditional on the merger between Tawana and Alliance being implemented and the latter receiving conditional ASX listing approval.
Tawana explained that A$15-million of the debt would be used to advance the Bald Hill mine’s dense media separation (DMS) fines circuit, upgrade the tantalum circuit and for additional working capital. The remaining A$5-million of the debt facility would be used to repay the Red Coast loan.
In terms of the standby credit, Tawana explained that the funds would be available to the new group formed by Alliance and Tawana following their merger. The facility would improve the balance sheet liquidity position of the group.
The merger, announced in April, is expected to be completed in November. In terms of the scheme of arrangement, Tawana shareholders would receive 1.1 new Alliance shares for every Tawana share held, leaving both sets of shareholders with a 50% interest in the merged entity. Tawana will be a wholly-owned subsidiary of Alliance.
Tawana said that it remained committed to facilitating the listing of Alliance following the implementation of the agreement and noted that the listing application was “well advanced”.
The merger is aimed at simplifying a single-ownership structure for the Bald Hill project, which is currently the subject of a joint venture agreement between the two companies.
The Bald Hill mine achieved commercial production in July this year. The company is continuing with a review to add a fines circuit and to increase the throughput of the existing DMS circuit. The addition of a fines stream will increase the current nominal 200 t/h capacity to 300 t/h, increasing total DMS circuit recovery rates and providing a significant concentrate production capacity.
Shares in Tawana traded 20% higher at 30c each.