Galan Lithium has received firm commitments to raise $31.5 million through an over-subscribed placement.
The company will issue 30 million new fully paid ordinary shares in the company at $1.05 per share to investors.
The issue price of $1.05 per share represents a 12.5 per cent discount to the last closing price of $1.20 on May 17 and 9.8 per cent discount to the ten day volume-weighted average price of $1.163.
The new shares will be issued on May 29 under Galan Lithium’s existing placement capacity under the Australian Securities Exchange.
The placement provides flexibility with respect to the company’s ongoing capital expenditure requirements at the Hombre Muerto West project and the Candelas project, both located in Argentina.
The flexibility will extend to the Greenbushes South West project that is located in Perth, Western Australia.
Proceeds from the placement will be applied to accelerate:
- the purchase of long lead items in preparation for Hombre Muerto West’s stage one (four kilotons per annum LCE), which includes liners, piping and lime plant
- prepayment for the earthworks contractor
- the workers camp expansion
- Hombre Muerto West’s stage two definitive feasibility study and production expansion studies
- further exploration and production well drilling
- contingency for extra work at the Greenbushes South project
- general working capital.
Galan Lithium managing director Juan Pablo Vargas de la Vega said this is an exciting time for the company.
“I wish to thank all the placement participants, old and new, who have strongly supported the Galan production plan that will take it from an initial smaller scale lithium producer to a big 60 kilotons per annum player,” Vargas de la Vega said.
“I also encourage all our loyal shareholders to get on board and participate in the entitlement issue which will get underway later this week.”