TORONTO (miningweekly.com) – Toronto-based project developer Canada Lithium’s shares on Tuesday took an early morning beating on the TSX after the company announced a C$12.5-million bought deal financing.
Just after the morning bell rang, the company’s stock plunged C$0.10 a share to trade 21% below its Monday closing price of C$0.48 a share, as investors sold the stock in droves. By Tuesday afternoon, the stock remained the most traded on the bourse, with 8.5-million shares having changed hands by 15:00 Eastern Daylight Time.
The company, which is developing its flagship Quebec Lithium project that would produce battery-grade lithium carbonate, had entered into an agreement with Dundee Securities to buy on a ‘bought deal’ basis 5.2-million flow-through common shares and 25-million units of the company.
Pending regulatory approval, the flow-through shares were priced at C$0.48 apiece, for gross proceeds of C$2.5-million, and the units, which consist of one common share and one common share purchase warrant, were priced at C$0.40 apiece, for gross proceeds of $10-million.
Each warrant would entitle the holder to acquire one share at a price of C$0.50 for a period of 36 months following the closing date, slated for November 13.
Dundee Securities also has the option to buy an additional 15% of the offering, in any combination of flow-through shares or units.
The net proceeds of the units would be used to advance exploration, development and for general working capital purposes.
Canada Lithium early this month said commissioning activities at its flagship Quebec Lithium mine and plant were proceeding according to its revised schedule, following a three-week maintenance and upgrade programme that started at the end of August, and that the company was on track to restart product shipments to Tewoo, in China, at the end of the month.
The company said mining operations continued at a reduced level and about 100 000 t of ore remained on the stockpile at the crusher. The mining operation was scheduled to resume at the end of the month.
The Val-d’Or operation will produce about 20 000 t/y of battery-grade lithium carbonate. Canada Lithium has a five-year offtake agreement for at least 12 000 t/y with China’s Tewoo-ERDC and an offtake deal for up to 5 000 t/y with Japan’s Marubeni Corporation.
The company’s stock had lost about 30% from the start of the year. The stock regained value in the mid-afternoon, trading at C$0.45 apiece.