Photo by: Bloomberg
PERTH (miningweekly.com) – Australian lithium developer Core Lithium has unveiled a A$106-million capital raise initiative to fund the development of its Finniss project, in the Northern Territory, and has announced a A$34-million investment from lithium major Gangfeng Lithium.
The ASX-listed Core on Monday said that it would undertake a fully underwritten placement to raise an initial A$91-million, placing some 293-million under its existing placement capacity.
The shares will be placed at a price of 31c each, representing a 13.9% discount to Core’s last closing price on August 6, and a 2.4% discount to its five-day volume weighted average share price.
In addition to the share placement, Core will also undertake a share purchase plan (SPP), allowing existing shareholders to subscribe for up to A$30 000 worth of new shares to raise an additional A$15-million.
Core told shareholders that it could increase or decrease the size of the SPP at its discretion.
Meanwhile, the company on Monday also announced an offtake agreement with Ganfeng for 75 000 t/y of spodumene concentrate from the Finniss project, over a four-year period. The offtake resulted in some 80% of Finniss’ Stage 1 production being contracted over the first four years of the mine life.
The offtake agreement included a A$34-million equity investment by Ganfeng, priced at 33.8c a share. The equity investment is subject to Core shareholder and Chinese regulatory approvals, as well as Core entering into binding arrangements for a minimum total financing of A$80-million.
“The offtake and equity investment by Ganfeng represents a transformational moment for Core. Ganfeng has a proven track record of investing in high-quality lithium projects across the world and of being a strong and supportive offtake partner. We welcome Ganfeng’s participation with Core, and look forward to developing a long-lasting, mutually beneficial relationship with them,” said Core MD Stephen Biggins.
“We now have immediate certainty over Finniss project fundingand we remain on-track to commence construction activities within the 2021 calendar year, ahead of anticipated first production in late 2022.”
A recently completed definitive feasibility study into the Stage 1 Finniss project, comprising an openpit operation and underground operation, estimated that the project would require an initial capital investment of A$89-million to support annual lithium production of 175 000 t/y from a one-million tonne a year plant.
The study estimated a post-tax net present value of A$170-million and an internal rate of return of 47%, with a pay-back period of two years. Life-of-mine C1 operating costs have been estimated at $364/t of concentrate generating a life-of-mine operating margin of more than $370/t, assuming a life-of-mine average sales price of $743/t.