Patagonia looks to raise $2.15M for South American exploration and development

Patagonia Lithium Ltd (ASX:PL3) is aiming to bank up to $2.15 million through a spate of capital raising to fund drilling work and a mineral resource update at its Argentinian projects, in addition to progressing exploration in Brazil.

The company is about to undertake a convertible note issue followed by a non-renounceable entitlement offer to eligible shareholders, to raise up to $2.15 million at a 5.9 percent premium to the previous closing price.

As part of the former, Patagonia’s executive chairman Phil Thomas will commit to $150,000 and take up his full entitlement of $34,000, with the issuing of Convertible Notes to him being both subject to shareholder approval and provided by way of an unsecured loan.

Additionally, major shareholder Southeast Mingqing Supply Chain (Fuyang) Co Ltd, has committed to subscribe for its full entitlement under the Entitlement Offer and will also subscribe for up to an additional $1,500,000 under the Entitlement Offer shortfall.

According to the Entitlement Offer – which will open on July 23 and close on August 9 – eligible shareholders will be issued one new share for every three of their existing shares, at an issue price of A$0.09 per new share.

This will be set to raise A$1.75 million before costs for the company, and successful applicants will also receive one attaching option for every two new shares (exercisable at
A$0.15, with an expiration date of August 31, 2025).

The proceeds of both capital raising ventures will go towards drilling in Argentina at Patagonia’s Formentera/Cilon lithium brines project and the Tomas III project at Incahuasi salar in Salta province, as well as its four groups of Brazilian concessions where the company is seeking REE Ionic clays, niobium and lithium.

Patagonia Lithium has been trading at 8.5 cents.