PERTH (miningweekly.com) – Lithium developer Piedmont Lithium has raised A$70.6-million through an underwritten US public offering of two-million of its American depositary shares (ADSs) to fund the development of its lithium project, in North Carolina.
The ADSs each represent 100 of the company’s ordinary shares and were issued at a price of $25 each, to raise a gross proceed of $50-million.
Evercore ISI, Canaccord Genuity and ThinkEquity acted as joint bookrunners for the offering, while Loop Capital Markets and Roth Capital Partners act as co-managers for the offering.
Piedmont on Thursday said that it had agreed to grant the underwriters a 30-day option to purchase an additional 300 000 ADSs, at the same issue price as the offering.
The ADSs will be issued under the company’s existing placement capacity, and will not require shareholder approval.
Proceeds from the offering will be used to continue the development of the Piedmont lithium project, including a definitive feasibility study, testwork, permitting, further exploration drilling and ongoing land consolidation, and for general corporate purposes.
An initial scoping study into the mine and concentrator project estimated that it would require a capital investment of $168-million to sustain an annual production rate of 22 700 t/y of lithium hydroxide over a mine life of 25 years.
The company has also undertaken a prefeasibility study into a proposed lithium hydroxide chemicals plant in Kings Mountain, in North Carolina, proving the optionality of a standalone merchant chemicals plant that would convert purchased spodumene concentrate.
The study into the potential merchant project estimated that some 22 720 t/y of lithium hydroxide could be produced over a project life of 25 years, at an average cost of production of $6 689/t.
The merchant project is expected to require a capital investment of $377-million for the chemicals plant, and will generate annual earnings before interest, taxes, depreciation and amortisation of $149-million a year, have an aftertax net present value of $714-million and an internal rate of return of 26%.