PERTH (miningweekly.com) – Lithium miner Galaxy Resources has announced plans to raise A$161-million to fund the Stage 1 development of its Sal de Vida project, in Argentina.
The ASX-listed miner on Wednesday told shareholders it would undertake a 1-for-14 fully underwritten pro-rata accelerated non-renounceable entitlement offer and institutional placement.
The institutional placement will consist of some 65-million shares, priced at A$1.70 each, to raise an initial A$111-million, while the entitlement offer will consist of a further 29-million shares, to raise some A$50-million.
The issue price represents a 15% discount to Galaxy’s last closing price, and a 12.5% discount to the company’s theoretical ex-rights price.
“This equity finance provides Galaxy with an enhanced level of certainty to commit to execute and develop Sal de Vida into a successful, lowest-quartile-cost lithium brine operation,” said CEO Simon Hay.
“Securing this funding for Stage 1 would allow us to confidently proceed into the early works phase, contract long lead items and complete pond construction in 2021 during the weather window. With electric vehicle demand continuing to rise in Europe and North America, we will also accelerate James Bay to a construction-ready status as these regions seek to localize raw materials supply and build-out lithium chemicals capacity.
“We will use these funds to advance and execute the development of our world-class assets and ultimately seek to contribute to supplying the expected global demand surge in lithium,” Hay said.
The Stage 1 development will consist of a brine evaporation and processing operation at Salar del Hombre Muerto, producing technical grade lithium carbonate. The Stage 2 project will be a duplicate of Stage 1, while the third stage will introduce the refining of the technical grade carbonate into battery grade.
An upgraded feasibility study for the staged development is expected early next year.
Galaxy said on Wednesday that front-end engineering design for Stage 1 would be completed by the first quarter of next year, with early works to start early in the year, and plant construction scheduled for late 2021. The company is expected to meet its previously stated development timeline, and to take advantage of an expected stronger lithium pricing environment from late 2022.