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- Lithium miners Galaxy Resources (GXY) is looking to raise $161 million to fund lithium projects in Argentina and Canada
- The company is allowing shareholders to purchase one new share for every 14 existing shares held for $1.70 each, representing a 15 per cent discount to its last trading price
- Funds from the offer will be used to develop the Sal de Vida lithium brine project in Argentina and James Bay project in Canada
- Following a successful entitlement offer, Galaxy will have a balance sheet of US$219 million (nearly A$300 million)
- Galaxy entered a trading halt this morning ahead of this announcement and is expected to commence trading again tomorrow, November 26
- Company shares last traded at $2 each on November 24
Galaxy Resources (GXY) is set to raise $161 million to fund lithium projects in Argentina and Canada.
The company is offering investors a one-for-14 pro-rata entitlement offer at $1.70 per share, representing a 15 per cent discount to the last trading price.
Funds from the offer will be used to develop the Sal de Vida lithium brine project in Argentina. Stage one of the project, which includes engineering and design work, is expected to be completed by the first quarter of 2021.
The lithium explorers are on track for the first production at Sal De Vida in late 2022.
Galaxy will also spend money on the pre-development activities to progress the James Bay lithium project in Canada.
Following a successful entitlement offer, Galaxy will have a balance sheet of US$219 million (nearly A$300 million).
“This equity financing 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,” CEO Simon Hay said.
“Securing this funding for Stage one 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,” he added.
With electric vehicle (EV) demand continuing to rise in Europe and North America, the company has decided to speed up James Bay to a construction-ready status, as these regions are looking for local sources.
“We will utilise 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,” Simon concluded.
Galaxy entered a trading halt this morning ahead of this announcement and is expected to commence trading again tomorrow, November 26.
Company shares last traded at $2 each on November 24.
