Aim-quoted developer Zinnwald Lithium on Tuesday announced it would seek to raise £4-million in an equity fundraising to advance its namesake project in Germany.
The proceed would be used for a value optimised bankable feasibility study for lithium hydroxide and to explore the potential to expand the size and scope of the project, the company stated.
“The funds to be raised in the placing will allow us to start 2022 with the capacity to advance several important work streams that we believe will be important to allow us to demonstrate an enhanced project concept that demonstrates the strengths we believe are inherent in the project,” said CEO Anton du Plessis.
Zinnwald Lithium would issue shares at 15.5p each, which represented a 17.5% discount to the five-day volume-weighted average price of the company’s ordinary shares at December 10.
The developer’s stock fell 17.52% to 16.50p a share on Tuesday.
Zinnwald Lithium entered into a placing agreement with Oberon Capital.
As part of the bookbuild, Henry Maxey, an existing 11.7% shareholder in the company, has committed to subscribe for up to 25 806 451 placing shares at the placing, representing a maximum commitment of £4-million. It is anticipated that demand from other investors in the bookbuild would lead to Maxey's subscription being scaled back, subject to Maxey receiving a minimum subscription of 6 451 612 new ordinary shares, representing a minimum subscription of £1- million.