Lepidico (ASX:LPD) plans renounceable rights issue for over $9M

• Lepidico (LPD) will conduct a pro-rata renounceable entitlement offer to raise up to $9.6 million in proceeds
• Shares will be issued at 1.3 cents each, a 19-per-cent discount to the 10-day volume-weighted share price
• Participants in the offer will receive one free attaching option for every two new shares bought
• The proceeds will help advance development activities for phase one and two projects, product sample manufacturing and working capital
• Lepidico is down 18.75 per cent and trading at 1.3 cents per share

Lepidico (LPD) will conduct a pro-rata renounceable entitlement offer to raise up to $9.6 million in proceeds.

Under the offer, investors will buy fully paid ordinary shares in the company, on the basis of one new share for every seven existing shares held as of May 26, 2021. The shares will be issued at 1.3 cents each, a 19-per-cent discount to the 10-day volume-weighted share price of 1.6 cents each. 

Participants in the offer will receive one free attaching option for every two new shares bought. These new options will be listed and will have an exercise price of 2.6 cents within two years. 

Shareholders will be able to trade their rights and apply for additional shares and options. 

The $9.6 million renounceable rights issue will be partially underwritten by lead manager Mahe Capital to $7.2 million. This represents 75 per cent of the entire entitlement offer. 

The company expects the entitlement offer’s closing date to be around June 11, 2021. 

Lepidico plans to use the proceeds of the renounceable rights issue for a variety of purposes. In particular, the company will accelerate phase one project initial development activities, such as early service, front-end engineering and design, and early works in Namibia. 

Some proceeds will also fund lithium mineral resource development in Namibia for the phase two project, the manufacturing of further product samples for prospective offtake partners, and working capital. 

Lepidico intends to immediately start phase one development works to keep the project on schedule for the start of mining in the September quarter of 2022. Chemical plant commissioning is expected to occur during the March quarter of 2023. 

The company is continuing to make progress on offtake agreements for all products from the phase one project, such as lithium, caesium and rubidium chemicals. Binding offtake agreements are expected to be finalised for phase one products during the second half of the 2021 calendar year.

Lepidico is down 18.75 per cent, trading at 1.3 cents per share at 2:02 pm AEST.