PERTH (miningweekly.com) – Lithium developer Sayona Mining will raise A$50-million to fund the acquisition of North American Lithium (NAL), and to advance the Abitibi lithium hub, in Quebec.
The ASX-listed company on Monday reported that it had raised an initial A$45-million in an oversubscribed share placement to institutional and sophisticated investors in North America, Europe and Australia, as well as major shareholder Piedmont Lithium, which had subscribed for A$8-million of the placement shares.
Some 600-million new shares will be issued under the share placement, priced at 7.5 c each, in two tranches.
The first tranche will consist of 423.6-million shares, to raise an initial A$31.8-million under Sayona’s existing placement capacity, while the second tranche of 176.3-million shares will be subject to shareholder approval at a forthcoming general meeting.
In addition to the share placement, Sayona will also undertake a share purchase plan (SPP) allowing existing shareholders to apply for up to A$30 000 worth of additional new shares in the company.
The SPP, which will open on July 21 and will close on August 18, is expected to raise a further A$5-million.
“We are delighted with the support for the placement from major and new institutional investors in Canada, the US, Asia and Australia as we build our institutional shareholder base,” said Sayona MD Brett Lynch.
“The capital raising has been structured to ensure retail shareholders have the same opportunity to participate and we look forward to undertaking the SPP on the same terms as the placement.
“This new funding will allow us to finalise our acquisition of NAL, a key part of our Quebec growth strategy, supporting the development of a world-scale Abitibi lithium hub that is purpose-built to supply the North American electric vehicle revolution.”
The Superior Court of Québec recently approved Sayona Mining’s joint C$196.1-million bid with Piedmont for NAL.
Subject to final adjustments at the close of the transaction, Sayona and Piedmont’s total cash consideration for the NAL assets would amount to C$94.4-million, with the companies also assuming reclamation guarantees, certain construction liens and relevant employee liabilities.
As part of the transaction, the two companies have entered into an assignment agreement with NAL creditor IQ, under which IQ has agreed to assign its rights and interest in its assigned debt. This debt is valued at more than C$111.8-million.
Under this transaction, the two companies will pay IQ C$36-million in cash, and will issue a further 20-million NAL shares at a value of C$20-million.
At the close of the transaction, Sayona and IQ will enter into a governance agreement for NAL, under which Sayona has agreed to pursue the establishment of industrial spodumene conversion facilities in Québec.
As part of these undertakings, a feasibility study into the development of a spodumene conversion facility will be conducted within three years from the transaction’s closure. In addition, NAL has undertaken to convert its spodumene production into lithium hydroxide or lithium carbonate within Québec from the sixth anniversary until the tenth anniversary of the closure.