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- Leo Lithium (LLL) secures a strategic placement and cooperation agreement with Chinese lithium producer Ganfeng to raise $106.1 million
- The new contract includes a commitment to increase the capacity at Leo Lithium’s Goulamina project in Mali to one million tonnes per year, along with the creation of a downstream conversion facility
- Ganfeng will hold a 9.9 per cent stake in LLL following a placement priced at 81 cents per share, based on a 6.5 per cent premium to its five-day VWAP
- Upon settlement, LLL will hold $177 million cash, and US$93 million cash and US$40 million undrawn debt held within the Goulamina joint venture
- LLL shares are up 16.2 per cent, trading at 84.3 cents at midday AEST
Leo Lithium (LLL) has secured a strategic placement and a cooperation agreement with China’s largest lithium producer, Ganfeng, to raise $106.1 million.
The price represents 9.9 per cent of Leo Lithium’s total pro-forma shares on issue.
The contract encompasses a range of key strategic benefits to Leo Lithium, including a commitment to ramp up operations at its Goulamina lithium project in Mali to one million tonnes per annum. A framework has also been developed with Ganfeng to cooperate on a downstream conversion facility.
LLL is set to issue 131 million new shares to Ganfeng priced at 81 cents per share, based on a 6.5 per cent premium calculated in line with the company’s five-day volume weighted average price (VWAP).
The capital raise will ensure Leo is fully funded for its share of the Goulamina stage one development and any operational costs that arise.
“The strategic placement and terms of the proposed cooperation agreement with Ganfeng represent a transformational opportunity for Leo Lithium and provide further validation of the tier one quality of Goulamina, including the significant potential upside of our development pathway,” Leo Lithium Managing Director Simon Hay said.
“The strategic placement was priced at an attractive premium to recent trading levels, being a 6.5 per cent premium to Leo Lithium’s five-day VWAP, and one cent off our all-time share price high,” Mr Hay said.
Ganfeng will utilise its existing conversion facility technology to analyse and engineer the design to construct the downstream facility.
Following the placement, LLL anticipates having $177 million in cash, plus US$93 million, with access to borrow up to US$40 million in undrawn debt held within the Goulamina joint venture.
The strategic placement is subject to the granting of regulatory approvals in China, as
well as the execution of a binding cooperation agreement.
LLL shares were up 16.2 per cent, trading at 84.3 cents at midday AEST.
